You may want to draw additional funds from your loan when*:
- The value of the collateral asset has increased. When this happens, the amount of collateral you’ve previously given will remain the same. However, as the value of the collateral asset increases you will ultimately have increased borrowing power which means that you can borrow more funds while posting less collateral! *Please note that this is not financial advice and is meant to be informative.
As an example, if you borrowed $10,000.00 at 50% LTV with Bitcoin as collateral, if the price of your Bitcoin was $10,000.00/BTC at the time of origination but increased by double during the loan term, then you would be able to increase the size of your loan to $20,000.00 with the same amount of collateral posted.
In this case, BlockFi would pay the remaining balance in full (including any fees and outstanding interest due) and would fund the difference of $10,000.00 directly to you.
* Please note that to qualify for loan refinancing, the LTV of your loan must be at least 15% lower than the originating LTV. In addition to this, a loan funding minimum of at least $10,000.00 must be satisfied as well. Refinancing will extend the loan maturity date for an additional 12 months.