What to Know Before You Borrow Against Bitcoin, Part 2: Rates and Fees

Before you borrow: the three questions

Most borrowers compare the headline rate and stop. These are the three things that actually decide how a Bitcoin-backed loan goes for you:

1. Custody — where your collateral sits, whether it's pooled with everyone else's, and who can move it.
2. Rates and fees — the number you were sold versus the cost you actually carry.
3. LTV and liquidation — the one number that decides whether you keep your Bitcoin.

Read them in order, or jump to the one you haven't asked about yet. This is Part 2.

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Most Bitcoin lending products sell you one number: the APR.

It's true. It's also rarely the whole cost. The headline is the hook; the real cost is everything stacked behind it.

Let's actually add it up. Watch the number move.

Start with a genuinely good rate

Say 8% - the kind of number the most aggressive products put on the homepage.

That's a good rate. It's also the floor, before anything else gets added. Keep it on screen. We're going to build from here.

8%

Add origination

Typically 1–2%, up to 3% on some sizes. Call it 2% average.

And on a credit line, this can hit every draw, not once. That's not a setup cost. That's borrow cost, every time you pull.

8% + 2% = 10%

Add repayment

Some charge a fee to pay you back down, a few tenths of a percent on the way out. Others don't let you prepay cleanly at all, which is worse. Say half a point.

8% + 2% + 0.5% = 10.5%

Add the fee for simply being in the loan

This is the one most people miss.

Maintenance fees. Platform fees. "Capital charges." Same idea: a recurring annual charge, often on your borrowed balance, just for the position existing. Roughly 2%.

8% + 2% + 0.5% + 2% = 12.5%

And we were generous the whole way

Every number above was the friendly end of the range. Run it again honestly:

• Origination runs to 3%, not 2% and on a credit line it hits every draw.
• The 8% was the headliner tier. Your actual size may price at 9% or higher;

industry average sits above 12%, and small positions price higher still.

• Add a margin call or a forced repay in a volatile week and there's more.

9% + 3% + 0.5% + 2% = 14.5%

🚨 The rate you were sold was 8%. The cost you actually carry is 12.5% on generous assumptions and 13–14%+ on realistic ones. Same loan. The headline was real - it was just never the whole number. 🚨

None of this is hidden, technically

It's in the docs. Spread across five pages and a calculator, while the cheapest single number gets the homepage.

The headline is built to be read. The total is built to be assembled by you, later.

That asymmetry is the product decision. A lender that wanted you to compare honestly would publish one number.

The playbook

Never compare headline APRs. Compare effective cost rate plus every fee you'll actually trigger, at your size, across the life of the loan.

Ask one question of any lender:

What's my all-in cost, per dollar, per year?

If they can't give you one number, that's your answer.