Margin Call FAQ
Celsius loans are backed by crypto, which is locked as “collateral”.
Your locked collateral value has to be maintained to an agreed value, in comparison to how much you’re borrowing.
For example, if you borrowed $1,000 you’ll need to have collateral valued at $2,000. Or an LTV (Loan to Value) of 50%.
When the value of your collateral drops, a margin call will automatically be triggered.
When a margin call is triggered on your loan, you'll receive an email notification and the easiest way to close the margin call is to add additional crypto as collateral.
All you need to do is make sure that you have enough crypto available in your Celsius wallet to bring your collateral value back to the agreed amount. When you do, reply to your margin call notification email or contact email@example.com to let our team know.
How do I add collateral?
Once your coins are in your Celsius wallet, just contact the loans team (firstname.lastname@example.org) or reply to your margin call notification email and they’ll add the collateral for you.
How much collateral do I need to add?
When a margin call is triggered, the goal is to reduce your current LTV back to the original LTV per your contract.
For example, if your loan was taken with a 33% LTV and the margin call is triggered at 65%, you need to reduce the LTV back down to 33%.
You will receive an email notification showing how much additional collateral is needed to reduce your LTV back to a stable level.
Depending on the market movements after the email was sent, you might need to add more or less collateral.
Can I add a different coin as collateral?
At the moment, we can only add the same crypto as originally locked as collateral.
For example, if your loan is BTC backed, we would need you to add more BTC.
How long do I have to react after you contact me?
You will have twelve hours to react to a margin call unless the market continues to drop dramatically. We will try to provide you with alerts when the market is very volatile.
If after your margin call the value continues to drop, making your Loan-to-Value Ratio (LTV) 80% or higher, we will sell enough of your crypto to bring the value LTV to 65%% until you respond or the five hours expires.
My LTV is below 65%. Is my margin call closed?
The margin call is not closed until the current LTV has been reduced back to your loan's contractual LTV.
What happens to the additional crypto?
The additional collateral is locked. At the end of your loan term, and once the loan is repaid, your collateral will be released back to you.
If your collateral has significantly increased in value since the margin call, your loan may be eligible for a reverse margin call. See additional information about reverse margin calls here.
Can I close my loan instead?
Yes, if you don’t want to add additional collateral, and if you would prefer, you can choose to close your loan. Reply to your margin call notification email to request your loan closure, or contact email@example.com
Can I pay down on my loan instead?
Yes, if you aren't able to add more collateral due to a margin call and would prefer to reduce your loan amount, we can help you. Please respond to the margin call email with this request.
What happens when the market goes back up?
When your locked collateral is worth more than the agreed amount, we can release the excess collateral back to your Celsius wallet.
What happens if I don’t do anything?
If you don’t take any action, we may add additional collateral from the available funds in your Celsius wallet.
If you don’t have enough funds to do that, we may also liquidate collateral.
What does liquidation mean?
Liquidation of collateral is the sale of collateral. This something that we try our best to avoid and something that we only do as a last resort.