Clapp has launched zero-interest crypto loan offering for Bitcoin (BTC) and Ethereum (ETH) holders. The product is built around a revolving credit line that allows users to borrow against their crypto assets while paying interest only on the funds they actually use. Unlike traditional crypto loans that accrue interest from the moment a loan is issued, Clapp’s model applies 0% interest to unused credit . Borrowing costs begin only when funds are drawn, and remain closely tied to loan-to-value (LTV) levels. According to Clapp, the structure is designed to give users access to liquidity without forcing them to pay for capital they do not need. Credit Line Structure Instead of Fixed Loans Clapp does not issue fixed-term loans. Instead, BTC and ETH deposited on the platform act as collateral for a revolving credit line. Once collateral is deposited, users receive a borrowing limit based on the market value of their assets. Funds can be withdrawn at any time, in full or in part, and repaid without a fixed schedule. As repayments are made, available credit is restored automatically. This structure separates access to liquidity from the act of borrowing itself. How Zero Interest Applies Under Clapp’s model, unused funds carry a 0% interest rate. Simply maintaining a credit line does not generate borrowing costs. Interest accrues only on the portion of funds that are actively borrowed. The applicable rate depends on the loan-to-value ratio, which measures the borrowed amount relative to the value of the BTC or ETH collateral. When LTV remains below 20%, borrowing costs stay low and the unused portion of the credit line remains fully interest-free. Focus on Conservative Borrowing Bitcoin and Ethereum price volatility makes risk management central to crypto-backed lending. Clapp’s credit line is structured to encourage conservative use rather than maximum leverage. Lower LTV levels provide: Greater buffer against market fluctuations Reduced liquidation risk More predictable borrowing costs By tying interest to utilization and LTV, the platform aligns borrowing costs with actual risk exposure. Flexible Repayment Terms The credit line does not have a fixed maturity date. Users can repay partially or in full at any time, without penalties. Interest stops accruing immediately once borrowed funds are repaid, while unused credit remains free of charge. This flexibility positions the product for short-term or intermittent liquidity needs rather than continuous borrowing. Addressing Common Misconceptions Clapp emphasized that “zero-interest” does not mean all borrowed funds are free indefinitely. The 0% rate applies specifically to unused credit, while borrowed funds accrue interest based on LTV. This distinction is intended to provide transparency and set clear expectations for users. Availability The zero-interest credit line is available to eligible BTC and ETH holders through the Clapp platform. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
