OKX Pledge Loan is a cryptocurrency-based financial lending service that allows users to borrow specific digital assets by pledging their existing holdings. Interest is calculated on an hourly basis, making it a flexible option for those looking to leverage their crypto investments.
If you're new to this feature, you might be wondering how to get started. This guide provides a clear, step-by-step tutorial on using the OKX Pledge Loan service via the OKX app.
Understanding OKX Pledge Loan
OKX Pledge Loan is a financial service offered by the OKX exchange. It enables users to borrow cryptocurrencies by pledging other digital assets from their funding account. The loan amount can be up to 65% of the total value of the pledged collateral.
This service supports both single-currency and multi-currency pledge modes. That means you can pledge one type of cryptocurrency or multiple types to borrow another digital asset. It’s a practical way to enhance the utility of your crypto holdings, whether for trading, investing, or other financial activities.
However, it’s important to remember that borrowing incurs hourly interest. You must also monitor your loan-to-value (LTV) ratio closely. If the LTV gets too high, your position could face liquidation. Always manage your risks wisely.
Key features of OKX Pledge Loan include:
- Fast loan processing
- Simple and intuitive operation
- Multiple pledge modes
- No platform fees
- Support for over 100 cryptocurrencies
| Feature | Description |
|---|---|
| Minimum Loan Amount | Approximately $0.20 (varies by cryptocurrency) |
| Supported Markets | Over 120 cryptocurrencies |
| Key Benefits | Quick loans, user-friendly, no fees, over-collateralization, multi-currency support |
Pros and Cons of OKX Pledge Loan
Like any financial tool, OKX Pledge Loan has its advantages and drawbacks. Here’s a balanced overview:
| Pros | Cons |
|---|---|
| Quick access to loans based on collateral | Requires careful monitoring of LTV ratios to avoid liquidation |
| User-friendly interface suitable for beginners | Interest rates are variable and can fluctuate significantly based on market conditions |
| Multi-currency support reduces risk from single-asset volatility | Platform risk: as a centralized exchange, OKX could face operational or systemic issues |
How to Use OKX Pledge Loan: Step-by-Step Guide
Using OKX Pledge Loan is straightforward whether you’re on the web or mobile app. Below is a tutorial based on the mobile application.
Register an OKX Account and Deposit Funds
Before you can use the pledge loan service, you need an OKX account. If you don’t have one, you can sign up easily. After registering, complete the KYC verification process and deposit funds into your account.
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Access the Pledge Loan Section
Open the OKX app and navigate to the “Finance” section. From there, select “Lending” to enter the pledge loan interface.
Choose a Pledge Mode
You’ll need to choose between two pledge modes:
- Single-Currency Pledge: Each loan is backed by one type of cryptocurrency. This isolates risk per loan.
- Multi-Currency Pledge: Multiple cryptocurrencies can be pledged together for a single loan, making management more convenient.
Your choice depends on your risk tolerance and asset diversity.
Enter Loan and Pledge Details
Next, input the amount you wish to borrow and select your collateral. For example, if you pledge ETH to borrow USDT, the system will automatically calculate the required collateral amount—typically up to 65% of its current value.
You can choose to pledge more collateral to lower your LTV ratio and reduce liquidation risk. Once you’ve confirmed the details, agree to the terms and confirm the loan. Your borrowed funds will be available shortly, and you can monitor your loan status, including equity, liquidation price, and interest, under “Current Loans.”
How to Repay a Loan on OKX
Go to the Lending Section
To repay, go back to “Finance” > “Lending.” Under “Current Loans,” select your active loan and click “Repay Now.”
Enter the Repayment Amount
You can choose to repay part or all of the outstanding amount. Confirm the transaction, and the repayment will be processed immediately.
What Is the Annual Interest Rate for OKX Pledge Loan?
OKX Pledge Loan uses a floating interest rate model. The annual percentage rate (APR) can range from 1% to 365%, updated hourly. When applying for a loan, you’ll see the “Last 24-Hour APR” for reference.
After borrowing, your current interest rate is visible in the “Current Loans” section. For a full overview of market rates, visit the “Fee Structure” page on the OKX website and select “Market Rates” to see a detailed table of APRs and borrowing limits.
How to Monitor Your LTV Ratio
While using OKX Pledge Loan, you’ll see key metrics like liquidation price and LTV ratio. The LTV ratio is calculated as:
LTV Ratio = Borrowed Amount / Value of Pledged Collateral
There are three important LTV levels to note:
- Current LTV: Maximum 65% at loan initiation. You can adjust this based on your risk preference.
- Warning LTV: When LTV reaches 80%, it’s a signal to add more collateral to avoid liquidation.
- Liquidation LTV: At 97% LTV, the system will automatically liquidate your collateral to repay the loan.
Interest accrual or a drop in collateral value can increase your LTV over time. You can adjust your collateral at any time from the loan order page by selecting “Adjust Collateral.”
You have two options:
- Add Collateral: Lowers your LTV and reduces liquidation risk.
- Reduce Collateral: Increases your LTV but also raises the liquidation price.
After adjusting, your new LTV and liquidation price will be updated in the “Current Loans” section.
Frequently Asked Questions
What cryptocurrencies can I use as collateral?
OKX supports over 120 cryptocurrencies for collateral. Popular options include BTC, ETH, and USDT, but the full list is available in the loan interface.
Can I repay the loan early?
Yes, you can repay all or part of your loan at any time without prepayment penalties. Early repayment reduces your interest charges.
How is the interest calculated?
Interest is calculated hourly based on the outstanding loan amount and the current floating rate. You can view accrued interest in your loan details.
What happens if my LTV gets too high?
If your LTV approaches 80%, you’ll receive a warning. You should add more collateral to avoid liquidation. At 97%, your position will be automatically liquidated.
Is there a minimum loan term?
No, you can borrow for as short or long as you like. Interest is charged hourly, so you only pay for the time you use the funds.
Can I borrow multiple currencies at once?
Yes, the multi-currency pledge mode allows you to use several assets as collateral for a single loan in your desired currency.
Conclusion
OKX Pledge Loan offers a low-barrier entry into cryptocurrency borrowing, with some loans available for less than $1. It’s an excellent tool for beginners to learn about leveraged crypto strategies without high costs. Always start small, understand the risks, and monitor your positions regularly.