Best Bitcoin Lending Platforms

Get information on Bitcoin lending sites, their benefits, different types of loans and how to obtain a Bitcoin loan


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What are Bitcoin Loans?

Bitcoin loans are a way for people to secure a loan using their Bitcoin cryptocurrency as collateral. They can also be loans where the currency of the loan is Bitcoin and the collateral may be Bitcoin or some other cryptocurrency. Investors who loan Bitcoin benefit from these transactions as they can earn a decent rate of interest on their asset, and as they are repaid in Bitcoin they will still profit from any price increases. Borrowers benefit as they can secure the funds they need while still retaining ownership of their Bitcoin. Bitcoin loans aren’t without risk to both borrowers and lenders. The volatility of Bitcoin means that a borrower may end up having the price of their loan increase. Lenders have to deal with the fact that Bitcoin loans have a higher default rate than traditional loans.

Bitcoin Loan Instant

Obtaining any Bitcoin loan is generally much faster and easier than getting a traditional bank loan. Depending on the type of loan platform used the time it takes to complete the loan process can range from a few hours to only minutes. The main requirement for an instant Bitcoin loan is to have the collateral to secure the loan. On a centralized platform there will be a KYC check and loan approval may take a few hours. Decentralized financial platforms require no KYC check and transactions between borrower and lender are made using smart contracts that execute immediately once terms are agreed on and the borrower has the collateral in their wallet.

Best Bitcoin Lending Sites

The best way how to loan Bitcoin or to borrow it is by using a crypto loan platform. There are many different Bitcoin lending sites that bring together borrowers and lenders/investors to facilitate an easy Bitcoin loan process. Depending on the platform lenders set their own terms and rates or allow the platform to handle the procedure for a previously agreed upon interest rate. Bitcoin lending rates will vary depending on the type of crypto collateral that is used, the loan to value (LTV) ratio, and the size and term of the loan. We have provided a brief overview of three of the best Bitcoin lending sites to both deposit to and borrow from.

BlockFi

BlockFi is a crypto lending platform founded in 2017 and located in New Jersey. They offer Bitcoin loans to borrowers as well as high interest earning accounts for lenders/investors. Borrowers can also get ETH loans or Litecoin loans if they prefer. The BlockFi loan to value ratio has an upper limit of 50% and a lower limit of 20%.  The minimum amount that can be borrowed is $5000 and the loan duration is 12 months. Interest rates can vary depending on a number of factors including the loan to value ratio but start at around 4.5%.  Lenders depositing their Bitcoin at BlockFi can get as high as 6% Annual Percentage Yield (APY) on their account. There is no minimum deposit amount and no monthly fees are charged. Deposits made to BlockFi are held by the Gemini Trust Company which is regulated by the New York Department of Financial Services.

YouHodler

YouHodler is a crypto loan platform owned by Naumard Limited and based out of Switzerland. YouHodler was launched in 2019 and offers a number of services including Bitcoin loans and interest bearing accounts for a number of different cryptocurrencies. Both fiat currency and crypto loans are offered at YouHodler.  A crypto loan can be in BTC or USDT and fiat currency loans are available in Euros, GBP, Swiss francs, and US dollars. There are 3 crypto lending program options available to borrowers:

  • 30 day loans: 90% LTV
  • 60 day loans: 70% LTV
  • 180 day loans 50% LTV

Bitcoin, Ethereum, and a dozen other cryptocurrencies can be used as collateral for loans. Interest rates are based on the type of loan with lower LTV ratios getting better rates. Bitcoin, Ethereum, Litecoin, and numerous other cryptocurrencies can be deposited to interest bearing accounts at YouHodler. The interest varies depending on the crypto currency. The minimum deposit amount is $100.

CoinLoan

CoinLoan is a peer to peer cryptocurrency lending platform that was started in 2016 and is located in Estonia. They offer Bitcoin loans and borrowers can also get an ETH, PAX or LTC loan. Fiat currency and stablecoin loans are also available. CoinLoan offers both short and long term loans. Loan terms vary from as short as 7 days up to 3 years in length. The loan to value ratio at CoinLoan goes as high as 70%. They accept Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Monero, Ontology, and CoinLoan Token as collateral for loans. Interest rates at CoinLoan vary based on the loan amount, term length, type of crypto used as collateral and the LTV ratio. Loans must be repaid in the same currency which was borrowed. CoinLoan users may also open interest bearing accounts using Bitcoin, Ethereum, Litecoin, and several other cryptocurrencies. No fees are charged and there is a €100 minimum deposit.

BTC Loan Advantages and Disadvantages

There are some definite advantages to taking out a BTC loan. Bitcoin lenders aren’t interested in what you are using the loan for unlike traditional lenders. There also won’t be a credit check although depending on the platform you may have to meet some KYC requirements. A major benefit of Bitcoin loans is the turnaround time. Borrowers can usually have loans deposited in their account the same day as they apply for it, sometimes in under an hour.

Nothing is perfect and there are a few disadvantages to Bitcoin loans. As mentioned Bitcoin is known for its volatility and often experiences big swings in its price. There is also a lack of regulation in some countries so there is nobody to turn to if things go wrong.

Bitcoin Loan without Verification

For those wanting to know how to borrow Bitcoin with no verification process, a decentralized financial platform or DeFi is the way to go. On DeFi platforms both the borrower’s and lender’s assets are handled by smart contracts with no middle man involved. Contracts are saved on the blockchain making them easy to verify. There are no credit checks or identification verification processes. Just create an account on a DeFi lending platform, have a crypto wallet and the necessary collateral, and open smart contracts to get a loan.

How to Borrow Bitcoin

There might be some slight variations between crypto lending platforms but the basic process for how to borrow Bitcoin will be the same:

  • Select a crypto lending platform
  • Create an account: The borrower’s collateral will need to be verified and many platforms will require identity verification
  • Select a loan: Most platforms will have a variety of options including term length of the loan, type of crypto used as collateral, and interest rates
  • Receive loan offers: Once an offer is received and accepted the requested funds will be transferred to the borrower.

Bitcoin Collateral Loan

Bitcoin collateral loans are as the name suggests loans that are secured by using Bitcoin as collateral. The amount of Bitcoin required will depend on the size of the loan. The loan to value ratio will vary but a 50% LTV is fairly standard. This means that if you want to borrow $1000 then you would need to have $2000 worth of Bitcoin as collateral.

Get a Bitcoin Loan

Although there is some risk involved when you borrow Bitcoin there are also many advantages. You won’t have to sell any crypto assets to obtain the loan and the entire process is much faster and easier than getting a more traditional loan. Cryptocurrency loans are gaining in popularity and there are many good BTC loan sites to choose from. The next time you require extra funds consider a Bitcoin loan rather than a bank loan to finance your needs.

Frequently Asked Questions

1. What is Bitcoin lending?

Bitcoin lending is a way for investors to earn interest on their Bitcoin while still retaining ownership and also provides people the opportunity to borrow Bitcoin using their cryptocurrency assets as collateral rather than having to sell the asset.

2. How to loan Bitcoin?

To be a Bitcoin lender you only need to open an account on a cryptocurrency lending platform and deposit the amount of Bitcoin you wish to loan out in the account. The platform locates borrowers who fit your requirements.

3. Where can I get a Bitcoin loan?

Bitcoin loans can be obtained on any cryptocurrency lending platform that handles Bitcoin. There are many such platforms to be found online and you can select the one that best meets your requirements. BlockFi, YouHodler and CoinLoan are three crypto lending platforms that offer Bitcoin loans.