CoinLoan vs BlockFi

CoinLoan and BlockFi are among the best crypto sites gaining the attention of the cryptocurrency community.

Some companies situated in the United States, such as BlockFi and Coinloan, provide crypto exchange services. Coinloan, on the other hand, trades on the New York Stock Exchange under the ticker code “COIN”. In addition to being able to purchase and sell cryptocurrencies, BlockFi is also a cryptocurrency bank. Loans and interest-bearing accounts are available.

The cost of investment, the number of cryptocurrencies supported, and the items supplied vary widely between the companies. Both, however, have an emphasis on safety and are appropriate for new users. Investors may only use eight currencies on BlockFi compared to the 141 currencies supported by Coinloan, which is greatly welcomed. Coinloan has the edge over BlockFi for new investors looking to broaden their portfolios.

These two exchanges were assessed for their overall investment cost, supported currency, and security. To make it easier for you to choose the best exchange for your needs, Let’s look into account features and goods that are unique to each platform.

What is CoinLoan?

CoinLoan acts as a middleman between lenders and borrowers, as opposed to acting as a direct lender. Lenders and borrowers can use the CoinLoan platform to transact in a variety of cryptocurrencies. A service fee of 1% of the loan amount is charged by the platform in this situation.

In the course of these negotiations, lenders and borrowers come to an agreement on things like interest rates and payback periods. Personal trading is encouraged on the site. This gives the parties involved the opportunity to bargain down the loan’s interest rate to a level they can live with. You can use the platform to do manual or algorithmic lending tasks, depending on your preference.

According to our CoinLoan review, cryptocurrency investors and borrowers alike can use the Estonian peer-to-peer lending platform to lend money for profit and deposit their cryptos in collateral.

Tokens issued by CoinLoan (CLT), one of the cryptocurrency lending companies, can be utilized to earn greater interest rates. With a CLT stake, you can earn up to 2% more interest on all of your other deposits.

What is BlockFi?

BlockFi is a Bitcoin lending platform established in the United States. Although it caters to a global clientele, it does not do business with EU, US, or UK-sanctioned jurisdictions. It has also recently expanded to India. A fast-expanding cryptocurrency platform, it is now available in 47 of the 50 United States.

The retail investor-focused lending concept is at the heart of BlockFi’s enormous success and widespread awareness. It has the lowest interest rates on the market, with APRs ranging from 4.5 percent to 12 percent. In contrast to traditional lenders, BlockFi tailors its APR based on the security provided by the borrower. Loan-to-value (LTV) is used to compute the annual interest rate, and BlockFi requires all loans to have an LTV of at least 50%.

Borrowers must pay back their BlockFi loans within a year. During this time, debtors are free to pay interest as they see fit. When an interest payment is due, the platform can choose to sell the collateral to recoup both interest and capital. Borrowers may pay off the principal or return the loan at its former interest rate if they are satisfied with the interest payment.

BlockFi’s loan application process is straightforward and easy to use. There is no requirement for borrowers to be members of the site in order to apply for a loan. Aside from an email address, social security number, and birth date, all that’s needed to complete KYC is an email address.

Features

●       Interest-bearing accounts: CoinLoan vs. BlockFi

We realized in our BlockFi review that BlockFi’s interest-bearing account is a way for investors to generate passive income by storing their crypto on their platform. Withdrawals are made every month, and interest begins accruing the day after a deposit has been made.

Currently, stablecoins like USDC, USDT, PAX, and DAI are being offered a 7.25% rate. The more cryptocurrency you deposit, the lower the rate of return you get. It is worth noting that tiers 1 and 3 have different rates of interest. Tier 1 has an APY of 4.5%, while Tier 3 has a rate of 0.1%.

With BlockFi’s Interest Payment Flex feature, you can select the currency in which interest payments will be made. Additional papers and a more prolonged verification process are required for its corporate offering, which functions in the same way as an individual BlockFi Interest Account or KuCoin exchange platform.

When it comes to CoinLoan’s earn product, it can accept a total of 26 different types of currency. Through the CoinLoan Interest Account, you may earn up to 12.3% APY on various assets. On the first of each month, CoinLoan deposits your daily interest earnings immediately into your CoinLoan account.

●       BlockFi vs CoinLoan: Crypto Loans

CoinLoan’s borrowing option allows you to receive a loan of up to 70% of the value of your crypto holdings, which you have pledged as security. If a crypto meltdown occurs, this high loan-to-value ratio can be dangerous.

If this happens, CoinLoan will send you an email to let you know how your crypto loan is progressing. This time, you have two choices. The first option is to repay the crypto loan in full or in part, while the second is to provide additional security.

It is possible to use CoinLoan to obtain major crypto-assets like Bitcoin and Ethereum, in addition to Uniswap, Wrapped Bitcoin, Bitcoin Cash, and Compound (AXS). Stablecoins like USDC, TUSD, PAX, USDT, DAI, and BUSD as well as a slew of other crypto-assets can be used to repay your loan in addition to EUR and GBP.

Three types of crypto loans are accessible on CoinLoan’s platform: crypto to crypto, crypto to fiat, and crypto to crypto loans, respectively.

When you apply for a loan via the CoinLoan platform, you don’t have to fill out any paperwork or undergo a credit check. As a result, there are no additional charges for fines, penalties, or lock-ins.

While CoinLoan allows you to borrow up to 70% of the value of your crypto collateral at a 9.75% interest rate, BlockFi only allows you to borrow 50% of the value of your crypto collateral. This is low compared to other platforms like Gate.io, etc. Your LTV ratio will have to drop to 20% in order to achieve a reduced interest rate of 4.5%. In the meantime, its origination fee has increased, but it stays steady at 2%. BlockFi’s members can also purchase other assets using crypto-backed loans.

Users of BlockFi are entitled to one free crypto or stablecoin withdrawal per month. In addition to this, the fees for each cryptocurrency vary based on the amount of the cryptocurrency and the amount of the stablecoin, but the fees for all stablecoins are the same at $50 per withdrawal, regardless of the amount of the stablecoin.

Summary of the loan feature option: CoinLoan vs. BlockFi

Currencies

Security

Fees

Ease of Use

Mobile App

Access

Wallets

CoinLoan Pros & Cons

Pros

• Overcollateralized loans
• Max. LTV 70%
• Earning both Fiat and Crypto Interest

Cons

• Not transparent
• High counterparty risk
• Subject to cash drag

BlockFi Pros & Cons

Pros

• The best option for US cryptocurrency investors
• Crypto managers you can trust.

Cons

• Free withdrawal (limited to one per calendar month).
• 2% setup charge for cryptocurrency loans.
• A day is added to the withdrawal process.

Conclusion

We’re seeing a growing number of licensed and respectable crypto lenders offering excellent interest rates to users, which are far higher than their traditional equivalents, as the overall crypto sector grows.

Are you concerned that your BlockFi or CoinLoan profits will be subject to cryptocurrency taxation? In fact, BlockFi and CoinLoan users must pay taxes on their interest income because it falls under the cryptocurrency tax bracket. As stated on their website, BlockFi’s crypto interest account earnings are taxed according to the fair value of digital currency held in their users’ accounts.

To sum it all up, you now have enough information to make an educated decision on which cryptocurrency investing platform would best suit your needs.