How to Repay a USDC Loan with USD

Background:

DeFi protocols such as Compound don’t lend USD directly as they can only lend assets that exist on the Ethereum network. This means if you converted your loan into USD (or another currency), you’ll need to convert it back into USDC in order to repay your loan.

Follow the steps below to convert USD or another fiat currency into USDC using an exchange. If you haven't yet taken out a loan but want to learn how to convert a USDC loan in USD, you can learn more here

If you already have USDC, skip to step 3 below. If your loan is in another currency such as USD, start with step 1.

1. Transfer the funds you will use to repay your loan to your exchange account. You can do this by logging into your exchange account, linking a bank account, and depositing the funds. If you don’t have an exchange account, it’s easy to set up an account on Gemini or Coinbase.

2. Once the funds have been deposited, purchase USDC in the amount of your outstanding balance plus some extra. It’s important to purchase extra USDC as the interest DeFi loans can accrue each second. Additionally, some exchanges may not allow you to transfer the USDC for a 4 - 7 day period as a fraud prevention measure. The hold period may be less for wire transfers but you should confirm with your exchange. Generally, the additional amount you should purchase will depend on the factors above, but for loans above $25,000 and below $50,000, including an extra $150 of USDC will likely cover any additional interest incurred. If your loan is under $20,000 and you know you will be able to transfer the USDC from your exchange account immediately, $5 extra may be all that is required. Regardless of the amount, any excess USDC after repaying your loan will automatically be transferred to your account or wallet and you can convert it back into USD.

3. Once you are able to transfer the USDC, log into your Rocko account and go to your loan dashboard. There you will see a button to “Make a Payment”. Click it and choose to repay your loan in full. On the next page, you will see the total amount to be repaid which includes a Payment Buffer. A Payment Buffer is to account for any interest that accrues during the time you start the loan repayment process through the funds being transferred into the DeFi lending protocol. Please note that this amount is an estimate and any excess USDC after repayment will automatically be returned to you or your Rocko wallet.

4. On the next screen, you will have the option to choose the funding source for your loan. If you have a U.S. Coinbase account in the U.S. and the transfer amount is below $10,000, you can sign in to this account using the “Sign In” button. You’ll be asked to provide permissions to allow Rocko to read your wallet addresses. If you have an account at another exchange or the transfer amount is above $10,000, please select “Other Exchange or Wallet Address”. You’ll need to log into your exchange account and manually input the wallet address(s) that you wish to receive your collateral.

5. Once you click “Confirm”, you’ll see your address for your Rocko smart wallet. If you signed in with Coinbase, you'll be prompted to provide permission for Coinbase to automatically transfer your USDC to your Rocko smart wallet. If your chose “Other Exchange or Wallet Address”, transfer the USDC from your exchange account to your Rocko smart wallet address.

6. Once you Rocko smart wallet receives the USDC, it will automatically repay your loan and withdraw your collateral, excess USDC, any earned rewards to your exchange account, Rocko smart wallet, or other address provided.

You can take out a new loan at anytime with Rocko!