The idea of borrowing against crypto at 0% APR sounds unrealistic at first. In most cases, it would be. Crypto markets are volatile, and lending always carries risk. Still, under the right structure and with strict risk controls, borrowing at or near zero interest is possible. The key variable is loan-to-value (LTV) and how transparently a platform manages it. What “0% APR” Actually Means in Crypto Lending In crypto, 0% APR rarely means that all borrowed funds are permanently free. More often, it reflects a model where interest depends on how much capital is actually used and how risky the position is. This is where credit lines differ from traditional crypto-backed loans. With a fixed loan, interest starts accruing immediately on the full amount. With a credit line, access to liquidity and borrowing are separate. If funds are not used, there is no cost. Clapp follows this credit-line approach. Users receive access to liquidity backed by crypto collateral, but interest applies only to funds that are actively borrowed. Unused credit carries a 0% APR, as long as LTV remains below 20%. Why LTV Is the Deciding Factor LTV measures the relationship between borrowed funds and collateral value. The lower the LTV, the lower the risk of liquidation and the more flexibility a platform has in pricing interest. In practice, borrowing at very low LTV — typically below 20% — creates a large buffer against price volatility. That buffer allows platforms like Clapp to offer 0% APR on unused credit and low interest on borrowed amounts without relying on hidden fees or unclear terms. How Clapp Applies 0% APR Transparently Clapp’s 0% APR conditions are straightforward. Users are not charged for simply having access to a credit line. Interest begins only once funds are drawn and is calculated based on the current LTV. If the borrowed amount is repaid, interest stops immediately. The unused portion of the credit line remains free. There are no time-limited promotions or unclear thresholds. The cost structure is tied directly to risk and usage, which makes it easier for users to anticipate and manage borrowing costs. A Practical Example Consider a user with $50,000 worth of BTC or ETH as collateral. If they borrow $7,500, their LTV sits at 15%. Interest applies only to the $7,500, while the remaining available credit stays unused and free of charge. If market conditions change and collateral value declines, margin notifications alert the user before LTV reaches dangerous levels. The user can then reduce exposure proactively rather than reacting to liquidation events. The Trade-Off Behind 0% APR Borrowing at 0% APR is not about maximizing leverage. It requires restraint. Low LTV means borrowing less relative to collateral, maintaining buffers, and monitoring positions. In return, users gain predictable costs and lower liquidation risk. Platforms that present 0% APR as effortless often mask these trade-offs. Clapp’s model makes them explicit. Who This Approach Works For Crypto borrowing at or near 0% APR suits users who treat loans as a liquidity tool, not a speculative strategy. It works best for long-term holders who need occasional access to capital and are comfortable managing LTV with the help of alerts and clear thresholds. It is less suitable for aggressive trading or high-utilization strategies. Bottom Line Crypto borrowing at 0% APR is possible, but only within a transparent, risk-controlled framework. LTV discipline is central, and credit-line structures make that discipline practical. By tying interest directly to usage, clearly defining LTV thresholds, and supporting users with margin notifications, platforms like Clapp make low-cost borrowing understandable and manageable — not a marketing promise, but a function of risk-aware design. 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.
