Clapp’s 0% APR Crypto Loans Explained: How to Borrow EUR Against Crypto

Zero-interest crypto loans are often presented as a headline feature, but the mechanics behind them vary widely. In most cases, a 0% APR does not mean that borrowing is free in absolute terms. Instead, it reflects a lending structure where interest depends on utilization and risk.

Clapp Credit Line product follows this approach. The platform offers a credit line backed by popular crypto like Bitcoin and Ethereum that allows users to borrow EUR while paying 0% interest on unused funds. Interest applies only once capital is drawn and is tied to loan-to-value (LTV) levels.

Credit Line Structure

Clapp does not issue fixed-term loans. Users deposit BTC or ETH as collateral and receive a borrowing limit based on the market value of those assets. This limit represents available liquidity, not a mandatory loan.

Funds can be drawn at any time, in part or in full, and repayments immediately restore the available credit. There is no fixed maturity date and no requirement to borrow upfront. This structure determines how the zero interest is applied.

How 0% APR Applies

Under Clapp’s model, unused credit carries a 0% APR. Access to liquidity alone does not generate interest costs.

Interest accrues only on the amount actually borrowed and is calculated based on the current LTV. When LTV remains below 20%, borrowing costs stay comparatively low, and the unused portion of the credit line remains interest-free. In effect, users are not charged for capital that remains idle.

Borrowing EUR Against BTC and ETH

Loans issued through the credit line are denominated in stablecoins such as USDT and EUR. This allows users to access liquidity without selling their crypto holdings, preserving exposure to Bitcoin or Ethereum while covering short-term funding needs.

Because BTC and ETH prices fluctuate, LTV can change even if the borrowed amount stays constant. For that reason, maintaining conservative utilization is central to managing risk and cost.

Risk and LTV Management

Loan-to-value serves as the primary risk control mechanism. Lower LTV provides a buffer against market volatility, reduces liquidation risk, and supports more predictable borrowing costs.

Clapp’s structure does not incentivize high leverage. Instead, it aligns borrowing terms with restrained usage, where liquidity is available but borrowing remains measured.

Repayment Terms

The credit line allows partial or full repayment at any time. There are no penalties for early repayment, and interest stops accruing as soon as borrowed funds are repaid. Unused credit continues to carry a 0% APR regardless of repayment timing.

This flexibility positions the product for intermittent liquidity needs rather than long-term borrowing.

Clarifying the 0% APR Claim

The 0% APR applies specifically to unused credit, not to funds already borrowed. Borrowed amounts accrue interest based on LTV, reflecting the underlying risk of the position.

This distinction is central to understanding how the product functions and avoids common misconceptions around zero-interest crypto loans.

Clapp’s crypto credit line offers a usage-based approach to borrowing against Bitcoin and Ethereum. By separating access to liquidity from the act of borrowing, the platform allows users to maintain available capital without incurring interest until funds are deployed.

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.