How Lava Refinance works

Lava Refinance helps you move existing debt, such as a bitcoin-backed loan from another lender, a credit card balance, an auto loan or a mortgage, into Lava's bitcoin line of credit (BLOC), so you borrow at a fixed rate against your bitcoin instead of selling it.

How it works

1. Tell Lava about the loan. Email concierge@lava.xyz with the size of your current loan and where it's held. Lava's Client Services team works with you directly from there.

2. Open a BLOC. Your bitcoin becomes collateral for a line of credit. Approval is based on that collateral, not a credit check or income verification.

3. Pay off the old loan. For traditional debt, you draw dollars from the BLOC and use them to pay your existing lender. Borrowed dollars arrive in your USD balance and can be sent to a bank account; see how stablecoin and bank transfers work on Lava. For a bitcoin-backed loan elsewhere, the team helps coordinate the move.

4. Manage one line. Repay part or all of the balance whenever you want, draw again without a new application, and pay interest only on what you've borrowed.

Costs and fees

The BLOC has fixed rates from 6.50% to 8.50%, set by your total line of credit balance and fixed for a full year after you open the line:

Interest compounds daily and is added to your balance. Each year, a 2% capital charge applies to the largest balance you carried; if that was $100,000, the charge is $2,000 on top of interest. There are no origination fees, early repayment fees or required monthly payments.

Before you switch, compare your current rate with these costs, and ask your existing lender about prepayment penalties or fees to release collateral. Whether refinancing lowers your cost depends on those numbers.

Risks and limits

• Your collateral changes. A credit card balance is unsecured; refinanced into a BLOC, it's secured by your bitcoin. An auto loan or mortgage paid off this way moves from being secured by the car or home to being secured by bitcoin.

• Liquidation takes the whole line. Draws start at up to 60% loan-to-value (LTV), the loan balance as a share of your collateral's value. If bitcoin falls to your liquidation price, the line is liquidated in full and Lava returns no collateral. Lava alerts you as LTV rises, and you can add collateral or repay to lower it. Liquidation Protection can move bitcoin from your available balance into collateral automatically; the app shows the threshold that triggers it.

• No schedule means the pace is yours. Interest compounds onto the balance, so a line you don't pay down grows, and its LTV rises even if bitcoin's price holds steady.

• The rate is fixed for one year. It's set for a full year from the date you open the line.

Who it's for

Refinance fits long-term bitcoin holders carrying debt elsewhere who want fixed-rate borrowing without selling their bitcoin. That includes people with a bitcoin-backed loan at another lender who want open terms, and people paying more on cards or other debt who are comfortable posting bitcoin as collateral. If you'd rather not put bitcoin at risk, or you want a set payoff schedule, a traditional refinance may suit you better. Larger or more complex facilities can go through Lava Prime.

Start a refinance on the Lava Refinance page.