Arch Lending has unveiled a refinancing service for Bitcoin-backed loans, enabling borrowers to transfer their debt to a new lender without liquidating their cryptocurrency holdings. The program targets individuals seeking more favorable interest rates on existing crypto-collateralized loans.
Bitcoin-backed loans allow users to borrow fiat or stablecoins by pledging Bitcoin as collateral, avoiding the need to sell their assets. However, refinancing such loans has traditionally been cumbersome because the original lender retains custody of the Bitcoin until the debt is fully repaid. Arch's new offering simplifies this process by directly paying off the existing lender, releasing the collateral, and transferring it to the new loan agreement.
Eligible borrowers do not need to provide additional funds or pledge extra Bitcoin to initiate the switch. Once the new loan is active, they may also have the option to increase their loan amount. Arch aims to secure rates up to two percentage points lower than the borrower's current rate, and origination fees are waived for qualifying refinances through November 30, 2026.
To illustrate potential savings, on a $250,000 loan, a two-percentage-point rate reduction combined with the waived origination fee could save more than $8,000 in interest and fees during the first year, assuming the balance remains constant. Actual savings will vary based on individual loan terms and market conditions.
Himanshu Sahay, Co-Founder and Chief Revenue Officer of Arch Lending, emphasized the benefit: "Borrowers should be able to look for better loan terms without having to sell their Bitcoin or come up with extra collateral just to make the switch. We pay the existing lender directly, the collateral comes over to Arch, and the borrower has a chance to secure a lower rate with their Bitcoin held in qualified custody."
One early adopter, Garrette Belanger, a Michigan pharmacy owner, refinanced his Bitcoin-backed loan through Arch and now pays approximately two percentage points less. Belanger, who runs Orange Pill Pharmacy, wanted a lower rate but his previous lender held his Bitcoin as collateral. Arch's direct payoff to the old lender was "a huge deciding factor for me," he said. Belanger is developing a cash-pay model for prescriptions and uses borrowing against his Bitcoin to fund inventory and expansion without selling his holdings.
When refinancing, borrowers must trust the new custodian with their digital assets. Arch holds collateral 1:1 in segregated custody with Anchorage Digital, a federally chartered bank and qualified custodian. The assets are not rehypothecated, meaning they are not lent out or reused.
Eligibility for the refinancing program depends on standard loan requirements, including minimum loan size and collateral criteria. The minimum loan size varies based on Arch's standard terms, and any borrower meeting those thresholds can qualify. Accepted collateral includes Bitcoin (BTC), Solana (SOL), Ethereum (ETH), XRP, Tether Gold (XAUT), and PAX Gold (PAXG).
It is important to note that crypto-backed loans carry risks, including potential digital-asset price volatility, margin calls, and partial collateral liquidation. The refinancing program is available now to eligible borrowers, with more information and applications at archlending.com/refinance-crypto-loan/.
Arch Lending is a US-based platform that enables holders of alternative assets to borrow against their holdings without selling. It supports Bitcoin, Ethereum, Solana, XRP, PAX Gold, and Tether Gold as collateral, with client assets held in segregated custody at Anchorage Digital.
This article is for informational purposes only and does not constitute financial advice.
