How to get loans using Bitcoin as collateral with Debifi: Process, Structure, and Expectations

Bitcoin-backed lending works best when expectations are aligned before a loan begins. For this reason, Debifi’s process prioritizes clarity, structure, and informed consent over speed or convenience.

Step 1: Onboarding and Eligibility The process begins with onboarding and compliance checks. Borrowers must understand the legal, operational, and financial implications of using Bitcoin as collateral. This stage is not a formality. It establishes the framework within which the loan operates and ensures that both parties share a common understanding of risk.

Step 2: Loan Structuring Loan structuring defines the core parameters of the agreement: loan amount, LTV, duration, interest rate, and repayment expectations. Conservative assumptions are encouraged. Lower LTVs reduce the likelihood of margin calls and liquidation, especially during periods of high volatility. Borrowers should assess their ability to service the loan under adverse market conditions - not just in optimistic scenarios.

Step 3: Collateral Setup and Custody Bitcoin collateral is transferred according to predefined custody rules. Borrowers are informed about where their Bitcoin is held, who controls it, and under which conditions it can move. Transparency at this stage is critical. Custody structure defines counterparty risk and shapes borrower confidence throughout the loan term.

Step 4: Loan Execution and Monitoring Once the loan is executed, borrowers receive funds and begin servicing interest. Collateral health must be monitored continuously. Margin calls are communicated clearly, and borrowers are expected to respond promptly if thresholds are reached.

Step 5: Repayment and Collateral Release Upon full repayment of principal and interest, the Bitcoin collateral is released back to the borrower. The process concludes where it began: with the borrower retaining ownership of their Bitcoin.

Structure Over Speed

Debifi’s approach reflects a broader philosophy. Bitcoin-backed lending is not about speed or leverage. It is about structured access to liquidity under clearly defined rules. Clarity before execution prevents problems later. In Bitcoin-backed lending, structure is not friction - it is protection.