Best Lending Platform for Litecoin
Crypto lending platforms bring borrowers and lenders together and facilitate the loan process. There are two types of crypto lending platforms:
- Centralized Platforms: Centralized platforms are the most popular type of crypto lending platform. When you use a centralized platform, it is the platform that determines interest rates and other terms for loans. They also manage the crypto assets of both borrower and lender and have access to user’s keys. Centralized platforms handle all the loan details for their clients so they are easy to use. Borrowers and lender will need to complete KYC requirements to use the platform
- Decentralized Platforms: On decentralized platforms loan details are handled using “smart” contracts allowing the lender to set terms. Borrowers and lenders retain control of their keys and there are no KYC requirements.
Lending platforms aren’t limited to Litecoin loans. You can obtain a BTC loan or other crypto loans by depositing the appropriate cryptocurrency.
There are a number of factors you should look at when selecting a crypto loan platform. Interest rates, fees, ease of use and security should all be considered. We have provided you a brief overview of 4 of the best crypto lending platforms for Litecoin.
BlockFi
BlockFi is a crypto asset management company based out of New Jersey. They offer interest earning accounts as well as crypto backed loans for Litecoin and several other cryptocurrencies.
Interest rates on Litecoin accounts are 4.5% APY. Interest bearing accounts aren’t charged monthly fees and there is no minimum deposit amount.
Interest rates for Litecoin backed loans vary based on the LTV ratio: 4.5% at 20% LTV, 7.9% at 35% LTV and 9.75% at 50% LTV. The duration of loans from BlockFi is 12 months and the minimum loan amount is $10,000.
YouHodler
YouHodler is a crypto lending platform based in Switzerland and launched in 2019. They offer crypto backed loans and interest earning accounts for Litecoin and a number of other cryptocurrencies. Litecoin accounts earn 5.5% APY and users aren’t charged monthly fees. To open an account at YouHodler requires a minimum deposit of $100.
Users can get Litecoin backed loans from YouHodler in 5 currencies: US dollars, Euros, GBP, Swiss Francs and BTC. Four loan options are available
- 15 day loans 90% LTV
- 30 day loans: 90% LTV
- 60 day loans: 70% LTV
- 180 day loans 50% LTV
Interest rates on loans vary depending on the option. Loans can be extended by paying a fee that ranges from 1% to 8%. The minimum loan amount is $100
CoinLoan
Based in Estonia, CoinLoan is another crypto lending platform offering crypto backed loans and interest earning accounts for Litecoin and other cryptocurrencies. Litecoin accounts have an interest rate of 5.2% APY but if you stake the CoinLoan Token it goes up to 7.2% APY. No fees are charged and the minimum deposit is $100.
CoinLoan’s Litecoin backed loans have a duration ranging from 1 month up to 3 years. Interest rates on loans start at 4.95% and can go as high as 11.95% depending on the LTV of the loan. CoinLoan’s minimum loan amount is €100 and there is a 1% origination fee.
Bitfinex
Bitfinex is a cryptocurrency exchange and lending platform registered in the British Virgin Islands and in business since 2012. One of the features of their site is Bitfinex Borrow, a peer-to-peer (P2P) lending platform where users can borrow funds and lend Litecoin to other users.
Litecoin and other cryptocurrency lender set their own rates and terms for loans and Bitfinex takes a fee based on the amount of interest earned. LTC and a number of other cryptocurrencies can be used as collateral to secure loans. Bitfinex loans can be paid in Bitcoin, USDT, Ethereum, Litecoin, DOT, XRP, EOS and more. The minimum loan amount is $100 USD and the maximum is $250,000 or the equivalent of any other cryptocurrency supported by Bitfinex.
LTC Loan to Cost
When discussing crypto lending a term you will often hear is loan to value. Confusion sometimes arises with Litecoin due to its symbol being LTC which also stands for loan to cost. Loan to cost doesn’t apply to Litecoin. It is a term mostly used in commercial real estate. Loan to value in Litecoin lending is the amount of the loan divided by the value of the collateral. For example a $100 Litecoin backed loan that requires $200 worth of Litecoin as collateral has a LTV of 50%. The amount of the loan ($100) x the LTV (50%) = collateral amount ($200).
Borrow Litecoin Loan Instantly
Litecoin backed loans can be obtained quickly and easily. Depending on the platform you use it will take anywhere from a few minutes up to several hours. Centralized platforms tend to take a bit longer as there are KYC requirements to fulfill and it can take a few hours to verify identity. However once ID is verified and your Litecoin is deposited, loans are generally released in a matter of minutes. When using decentralized platforms there are no KYC requirements and as long as the necessary collateral is in place, the entire loan process takes only minutes.
How to Get a Loan of Litecoin
The Litecoin loan process is very easy and requires only a few steps:
- Register to a platform that accepts Litecoin as collateral
- Verify your identity by providing a copy of your passport or other official ID
- Deposit the required amount of Litecoin to secure the loan
- Receive the loan
You may encounter minor variations in the process on different platforms but essentially most follow the same basic procedure.
Litecoin Based Lending
The procedure for lending Litecoin is similar to the borrowing process and just as easy:
- Register to a platform that handles Litecoin
- Verify your identity to fulfill the KYC requirements
- Deposit your Litecoin to the platform
- Start earning interest on your Litecoin
The platform uses your deposit to provide loans to borrowers on the platform. In return they pay you interest at a specified rate. Borrowers secure the loan with collateral to ensure your funds aren’t lost if they default on the loan. The platform manages everything; all you need to do is wait for your interest.
