Best Crypto Lending Platforms

Find out the best cryptocurrency loan sites, services & platforms - read our latest reviews

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Apparently, there are a lot more things you can do with your crypto assets than you know about. With digital currencies growing in popularity, investors are keen to find new ways of making the most of their holdings. And one of the best ways to do this is through crypto lending or loans. In this detailed guide, we’ll tell you how these concepts compare to traditional credit schemes and how to make the most out of them as a lender or borrower.

Crypto Lending Overview

In simple terms, a crypto loan is a way of using your crypto assets as collateral to borrow liquid funds from a lender. It works in the same way as a traditional financial loan except that the borrower doesn’t necessarily need to complete KYC registration and liquid funds, in this case, can either be offered as digital currency or fiat money. Contrary to what you might think, crypto loans are safe and secure. And more importantly, the process is extremely fast and features less hassle compared to conventional loan processes.

What Is A Crypto-Backed Loan?

A crypto-backed loan is any type of loan that’s secured by offering your crypto holdings as collateral. This way, you can obtain liquidity without having to sell off your holdings. Just like in the traditional finance world, where high-value asset-backed loans attract small interest rates, crypto-backed loans are offered with affordable interest rates.

What Is Crypto Lending?

Crypto lending is exactly what it sounds like. It is a form of investment that involves lending your digital currencies to another user on a crypto lending platform. The lending platform acts as a third party that facilitates the transaction by connecting the lender with the borrower. Once the credit period expires, the crypto asset(s) will be returned to the lender’s wallet with a predetermined fee or interest.

How Crypto Lending Works?

The principles of crypto lending are straightforward and similar to traditional lending. One customer offers to lend out his crypto assets (via a lending platform) to anyone willing to borrow them and pay them back with interest.

For instance, let’s say you have 10 tokens of a particular currency (say Bitcoin or USDT) that you do not need at the moment. You can lend them out on a lending platform and earn passive income in four simple steps.

  • Create a wallet with a reputable crypto lending platform
  • Transfer your crypto assets to the wallet
  • Deposit or lend your money into the pool of funds that other users can borrow from
  • Withdraw your investment and interest at a later date

Most times, the crypto asset(s) deposited by the lender is lent out to other customers. But in some cases, the borrower might not be another user per se because the lending platform might decide to use the deposited funds for other investment purposes.

As the intermediary, the lending platform does all the work, from finding a qualified borrower to issuing the loan and recovering the interest. To help mitigate the risks involved in the process, crypto lending platforms use the loan-to-value (LTV) ratio to calculate how much credit a user can apply for.

What is Loan-to-Value (LTV) Ratio?

The loan-to-value (LTV) ratio is used in crypto lending to compare the value of digital currency borrowed with the value of the asset(s) presented as collateral.The LTV ratio is used to determine the interest rate and whether or not your credit application is approved by the lending platform.

How To Calculate Loan-to-Value Ratio (LTV)

The LTV ratio is calculated by dividing your current balance by the amount of crypto assets you wish to borrow and multiplying the outcome by 100 to get the percentage.

For example, let’s say you have 200 USDT tokens in your wallet and you plan to use them as collateral to borrow another 500 USDT tokens. That means, technically, you’re borrowing 300 USDT tokens. Recall that USDT tokens are hedged against the US dollar. So, one USDT equals one dollar.

Based on this, your LTV ratio will be the value of the crypto asset you’re borrowing ($300) divided by the overall value of the loan ($500) and multiplied by 100.

For maths-savvy crypto investors, this sentence translates to:

  • $300/$500 * 100 = 60%.

Cryptocurrency Lending Platforms

As one of the most intuitive concepts within the cryptocurrency space, crypto lending has gained a lot of traction in recent months. Consequently, traditional crypto exchanges and other dedicated lending platforms are now offering the service with several perks to entice customers.

Generally, there are two basic types of crypto lending platforms: centralized (CeFi) and decentralized (DeFi).

We’ll expand more on these two later, but critically, here are some of the key factors to consider when choosing a crypto-lending platform:

  • Interest rates
  • Amount of collateral required
  • Deposit limit
  • Lending duration
  • Fees
  • Digital Currencies Supported
  • Platform’s risk

Based on these factors, we’ve drawn up a list of viable crypto lending platforms that we’ll explore briefly.

BlockFi

  • Personalized rate for $100,000 above
  • Administration and monthly withdrawal fees
  • No deposit limits
  • Easy setup
  • Flexible withdrawals

As one of the top crypto lending service providers, BlockFi allows users to get a crypto loan without any paperwork whatsoever. More interestingly, you wouldn’t even have to sell your crypto holdings to obtain the loan. The platform supports a vast range of currencies and is one of the few exchanges in the crypto industry that offers compound interest and zero fee trading. BlockFi is designed with high-level security features like MFA and KYC. One downside of the BlockFi trading platform is this withdrawal fee, which is relatively small, but rather than pay for each withdrawal, you only get to pay once every month. BlockFi’s administration fees are incredibly low, starting from as low as 1%. But we must also mention that the minimum value of assets you can borrow on the platform is $10,000.

Youhodler

YouHodler was established in 2019 and is based out of Switzerland. They are owned by Naumard Limited and registered in the Republic of Cyprus. The focus of YouHodler is crypto-backed loans as well as interest bearing savings accounts.

The minimum amount available from YouHodler is $100. Loans can be received in EUR, USD, CHF, GBP, BTC or Stablecoins. YouHodler accepts over 40 different cryptocurrencies as collateral shown in the following table:

BitcoinEthereumChainlinkUniswap
CompoundMakerSushiSwapyearn.finance
SynthetixOmiseGoPaxos GoldDogecoin
LitecoinRippleStellarEthereum Classic
OxTronHuobi TokenBancor
CardanoBinance CoinAugurMonero
DashBasic AttentionTezosEOS
Bitcoin CashAavePolkadotAvalanche
BitTorrent1INCH NetworkFTX TokenNEAR Protocol
ZillicaElrondPancakeSwapFilecoin
CosmosSerumFantomTerra

There are three basic crypto lending programs offered by YouHodler

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

The interest rate will depend on which of the above options you choose. There is a onetime interest payment at the end of the loan term.

In the event a borrower can’t fully repay their loan YouHodler provides them with the option of reopening the loan. For a small fee borrowers can reopen a loan under the same terms as the original if the loan is near its expiration. Borrowers can also choose the “Close Now” option to pay off the remaining balance of a loan using their collateral with the remainder being returned to the borrower. This option also includes a service fee.

CoinLoan

CoinLoan is an Estonia based cryptocurrency lending platform that was established in 2016. The minimum loan amount is $100. They offer both short and long term loans that range in length from a minimum of 7 days up to 3 years.

Eighteen different cryptocurrencies are accepted as collateral at CoinLoan: BTC, LTC, ETH, XMR, BCH, XRP, XLM, LINK, PAXG, WBTC, DOT, UNI, MKR, AXS, SUSHI, COMP, YFI and ADA. Borrowers can withdraw in Euros, USD, GBP, TUSD, USDC, BTC, LTC, ETH, XMR, PAX, USDT, DAI, BUSD, XRP, LINK and WBTC.

The amount of a loan is based on the LTV and CoinLoan offers 4 different LTVs, each of which has a different interest rate.

LTVInterest RateOrigination Fee
20%4.95%1%
35%7.95%1%
50%9.95%1%
70%11.95%1%

Borrowers will need to complete a KYC verification process which is automated and only takes a couple of minutes. Once you have completed the verification process and deposited the required collateral loan approval is a matter of seconds. There are no credit checks involved.

There is no penalty for paying off a loan early at CoinLoan. If the term is for 3 years and you pay it off in 3 months, you will only pay interest for 3 months. Borrowers can raise or lower the LTV of a loan by adding or subtracting to their collateral as their individual needs dictate.

CoinRabbit

  • No KYC and Credit check
  • Top-tier security and cold wallet
  • 130+ supported currencies

CoinRabbit is one of the best crypto lending platforms around. It offers a simplistic non-KYC approach. All you’ll need is a valid email and phone number to open an account. The interest rate available on CoinRabbit varies depending on the market outlook, but on average, you can get up to 10% under normal market conditions or 14% in a bull market. The minimum deposit is $500, while the max is $10,000 in stablecoins.

Additionally, CoinRabbit supports stablecoins like USDT and USDC, as well as ERC-20 tokens. The platform features 2FA authentication security and support for over 130 digital currencies, including Bitcoin, Ethereum, Ripple, etc. So, users are literally spoilt for choice. More importantly, the whole process can be completed in four simple steps within ten to fifteen minutes and loans are disbursed almost instantaneously.

  • Calculate your crypto loan
  • Get your crypto asset
  • Start spending
  • Get back your collateral

Nexo

  • No origination fees
  • Instant approval
  • No credit checks
  • No monthly repayment
  • Large credit limit (from $50 to $2 million)
  • No paperwork required
  • 40+ Fiat cryptocurrencies supported

Nexo is an all-in-one crypto platform that offers a range of products and services, including crypto debit cards, NFT lending, and crypto lending. The Nexo crypto lending service offers customers the flexibility to borrow as much or as little as they want. Since the service was launched in 2018, the platform has issued more than $7 billion in credit to over five million customers, making it one of the most reliable lenders in the crypto industry.

SmartFi

  • Receive loan proceeds in stablecoin
  • Flexible credit options on your own terms
  • No monthly payments
  • Fixed term interests

SmartFi is another multi-purpose cryptocurrency platform that offers a range of crypto-related services. Much to our delight, the platform offers a non-bank crypto-backed lending service for retail and commercial purposes. One amazing feature about the SmartFi crypto lending platform is that customers can receive loan payouts in three stablecoin tokens, including SFUSD, USDT, and USDC.

SmartFi Lending Process:

  • Verify ID
  • Confirm terms of loan
  • Send collateral to SmartLoan
  • Receive your funds to your wallet in stablecoin, ACH or bank wire

Spectrocoin

  • High loan-to-value ratio
  • Super low entry level (€25)
  • Competitive rates
  • Flexible repayment

Spectrocoin is an all-in-one crypto hub that allows customers to trade digital currencies and borrow crypto. The Estonia-based company also offers other exciting perks like card services and IBAN accounts, but of course its crypto lending program is what we’re concerned about in this guide. The platform supports both fiat and digital currencies like the Euro, Bitcoin, Ethereum, and others. Spectrocoin offers some of the best interest rates in the industry, and there are no hidden charges. Additional perks include a high loan-to-value ratio and flexible repayment plans. So far, Spectrocoin is the only platform that allows customers to send and receive funds with an IBAN account.

Spectrocoin Rates Table

Lowest ratesMost PopularMax LTV
4.95%

Rates from 25% LTV

7.65%

Rates from 50% LTV

11.45%

Rates from 75% LTV

Micro

Under €1,000

5.58%8.95%13.45%
Standard

Between €1,000 to €15,000

5.55%7.65%12.75%
Large

Over 15,000

4.95%7.65%11.45%

How Spectrocoin Crypto Loan Works

  • Deposit assets
  • Choose your terms
  • Receive your loan
  • Maintain loan-to-value %
  • Repay loan & pay interest

Binance

  • Flexible repayment
  • No transaction fee
  • VIP Tier Rates
  • Partial Liquidation
  • Flexible repayment

As the world’s biggest crypto exchange based on trading volume, it’s only fair that Binance offers crypto loan services. And as far as we know, Binance is one of the top crypto lending platforms in the industry.

Generally, the exchange supports most digital currencies, which is a plus. Binance’s crypto lending program covers a wide range of loanable and collateralized crypto assets. Crucially, the fees and interest rates on the platform are incredibly competitive. The credit duration on Binance ranges from seven to 180 days. But, of course, you can choose to repay the loan in advance. In this case, the interest will be calculated based on the number of hours the loan has been running.

Interestingly, Binance has an overdue duration service, more like an additional period (outside the agreed duration) for customers to repay their During this period, the customer will be charged three times the normal hourly interest. And if they’re still unable to repay after the overdue duration, the collateral will be liquidated. For more details, see the loan repayment overdue duration table below.

Loan DurationOverdue Duration
7-14 days72 hours
30,90, and 180 days168 hours

SALT Lending

  • Option to receive payouts in stablecoin
  • No impact on your credit score
  • APRs from 0.52%*
  • Terms from 12 to 60 months
  • Starting LTV from 20% – 70%
  • $0 origination or prepayment fees

Founded in 2016, SALT Lending is the world’s first cryptocurrency lending platform. The early success of the platform paved the way for new crypto lending companies to enter the space.

SALT Lending is built on an ERC-20 smart contract and the offered services are tailor-made for crypto lenders and borrowers. The platform offers personalized and business loans hedged against different digital currencies. Credit terms on the SALT Lending platform range from three to twelve months. SALT Lending membership can be bought using the SALT token, which is the platform’s native token. Membership gives you access to a range of premium services, including the option of borrowing money from an extensive network of lenders. The platform supports a wide range of digital assets as collateral for loans, including Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC), TruUSD (TUSD), USD Coin (USDC), Paxos Standard Token (PAX), PAX Gold (PXG). However, with a minimum loan amount of $5,000, the entry-level of the SALT Lending platform is quite high.

What’s the Point of Crypto Lending?

Primarily, the main benefit of crypto lending is the interest that is returned on the investment. More often than not, the interest rates offered by lending platforms are much higher than the rates offered by traditional lending firms. The crypto lending scheme also holds a number of perks for borrowers. For instance, it gives crypto investors additional liquid funds and leverage as required and also allows them to make investments beyond their original capacity.

DeFi (Decentralized) Lending

Decentralized Finance (DeFi) lending takes away the need for intermediaries in crypto lending. Platforms under this category work based on smart contracts, which allow the users to interact directly with the protocol. In other words, the smart contracts automatically handle all the processes, from paying out loans to liquidating collateral.

And since the system is governed by smart contracts, loans are approved instantaneously. Unlike CeFi lending, DeFi lending is permissionless, which means customers are not required to complete KYC verification before obtaining crypto loans. In fact, you don’t necessarily need to have an account with the platform; you can just connect your wallet to the lending platform using decentralized applications (DApps). All of these factors give DeFi lending an edge over CEFI lending. However, customers are usually required to deposit collateral that’s worth more than their loan when borrowing from DeFi lenders.

Decentralized lending can be accessed through DeFi platforms like AAVE, MakerDAO, Compound, Liquity, Venus, TrueFi, etc. Overall, there is about $65 billion liquidity currently locked-in DeFi lending platforms and that number is set to rise in the coming years.

CeFi (Centralized) Lending

Centralized finance (CeFi) lending is more or less the opposite of DeFi lending. Here, the lending process is regulated by a central entity known as the lending platform. Once the user deposits the crypto asset, the lending platform takes charge of all the processes involved, including transferring the cryptocurrency from the lender to their borrower. Instead of loaning out all your cryptocurrencies to a particular customer, CeFi lending providers create different liquidity pools which are used to distribute the crypto assets to different users simultaneously.

Critically, CeFi lending offers a simplistic and safe user interface. However, CeFi lending customers are mandated to complete KYC verification before they can lend cryptocurrencies or obtain crypto loans.

Categories Of Crypto Loans

Generally, crypto loans are offered in two categories to offer borrowing customers a more streamlined experience. They include collateralized loans and flash loans, also known as non-collateralized loans.

Collateralized Crypto Loans

In crypto lending, collateralized loans are loans that are backed by cryptocurrency. This type of loan gives the borrower more control over the borrowed assets. Most crypto lending platforms offer collateralized loans because they’re backed by crypto assets that can be recovered if the borrower doesn’t meet the loan terms.

Flash (non-collateralized) Crypto Loans

A flash loan is a type of crypto loan that is not hedged against crypto assets. In other words, they are crypto loans without collateral. This is an enticing scheme, especially because the loan can be obtained without any form of investment from the borrower’s end.

Typically, the processes for a flash loan (from approval to repayment) are executed within a single block. This means that if it becomes impossible for a borrower to repay the loan with interest, the transaction is automatically canceled even before it’s validated in a block. The processes are controlled by a smart contract, so the transactions are executed instantly with little or no human interaction.

Peer-To-Peer (P2P) Crypto Loans

A peer-to-peer (P2P) crypto loan is a lending program that allows users to borrow crypto-backed liquidity or digital currencies directly from other users. A peer-to-peer (P2P) model takes away the need for an intermediary or middleman. Interestingly, the lender gets to decide the value, terms, and interest rates of a P2P loan. Admittedly, the transaction will still be executed on a platform provided by an exchange or a crypto-lending company. But generally, the role of the lending platform, or in this case, the P2P platform, is greatly reduced.

How P2P Loans Work For Lenders

  • Open an account with a P2P crypto lending platform.
  • Complete KYC Verification
  • Look for available lending offers
  • Choose the one you’re willing to fund
  • Monitor and manage the loan

How P2P Loans Work For Borrowers

  • Sign up with a P2P lending platform
  • Complete KYC Verification
  • Make a loan request
  • Receive loan
  • Repay loan at the end of the loan term

Crypto Loans Without Collateral

Some lending platforms offer crypto loans without collateral as a way of enticing customers who do not have a crypto holding. These types of loans are called flash loans and can be obtained by just about anybody as long as they are able to complete KYC registration. But in some cases, they’re issued based on the customers’ lending history or debt-to-income ratio.

Crypto Lending Rates

Interest rates vary depending on the crypto lending platform and the token you’re transacting with. The interest rates in crypto lending can be subdivided into two categories: APR and APY.

APY is the acronym for Annual Percentage Yield. This is the amount of interest an investor will earn for lending their crypto assets.

Meanwhile, APR means Annual Percentage Rate, which is basically the amount of interest the borrower will be required to pay after the loan term has expired.

On average, you can easily make between 3 to 8 percent interest when you lend volatile tokens. The interest rate is much higher for stablecoins, ranging between 10 to 18 percent. Below are the lending rates of some of the most prominent loan providers in the crypto industry.

Lending PlatformAPY RatesAPR Rates
CoinRabbitFrom 12% to 17%From 12% monthly 
NexoFrom 5.9%From 0%
SmartFiUp to 12% (compounded monthly)From 4%
BinanceCalculated hourly/dailyCalculated hourly/daily
BlockFiUp to 7%From 4.5%

Risks Of Cryptocurrency Loans

It’s no secret that crypto as an asset class is incredibly volatile and the crypto market itself isn’t properly regulated just yet.

So, it’s inevitable that cryptocurrency lending and crypto loans would carry some form of risks not just for the lender but also for the borrower.

For Lenders

Perhaps the biggest risk for cryptocurrency lenders is that the lending platforms don’t offer the same level of protection that conventional financial houses offer. As standard practice, all funds in US banks are insured with the Federal Deposit Insurance Corporation to the tune of $250,000 per depositor. This is more like a reserve that can be used to refund customers if the bank goes bankrupt. Unfortunately, crypto lending platforms don’t have this, so the risk of investors losing their money is higher, especially in the event of a market crash or huge scam. Borrowers are affected in some way as well because their collateral is held up within the system.

Illiquidity is another bottleneck of the crypto loan scheme. Once you transfer your crypto holdings to lending platforms, they become illiquid, meaning they cannot be easily accessed or converted to liquid cash.

For Borrowers

For borrowers, the risk of margin calls is one that sometimes triggers sleepless nights. Most of the time, crypto loans are backed by volatile cryptocurrencies. Consequently, a sharp price movement in the wrong direction would drive the collateral’s value below the agreed LTV and ultimately trigger a margin call. In this case, if the customer is not alerted to add more liquidity, their collateral will be automatically liquidated. This sounds like a long process, but with the high volatility of the crypto market, borrowers can be liquidated within minutes. Additionally, a breakdown in the lending protocol (which is most of the time caused by cyber criminals) could see a borrower lose all or some of their collateral.

Tax Advantages of Crypto Loans

Just like the loans obtained from traditional financial institutions, crypto-backed loans are not considered taxable income in most countries, like the US. This means crypto holders can technically use their crypto assets to navigate their tax liabilities through crypto lending platforms.

For example, let’s say you bought Bitcoin for $500 in August 2014. Now that the price has appreciated to around $20,000, you can either sell it and incur tax liability, or alternatively, you could use the asset to borrow liquid cash from a lending platform. Most of the time, it’s a win-win situation for the borrowers because they get liquidity without having to sell their crypto holdings, and more importantly, they don’t have to worry about paying tax.

What Can I Do With Crypto Loans?

It may sound weird, but the liquidity gotten from crypto loans can be used for just about anything based on the discretion of the borrower. You can use it to buy assets or invest in another business that’s not even related to crypto. Interestingly, crypto loans can also be used to service loans obtained from traditional financial houses. The only caveat is that the borrower has to pay back or risk losing their collateral.

Advantages Of Crypto Loans

  • Easily accessible capital/liquidity
  • Access to loans without KYC and credit check (exclusive to DeFi )
  • Easy way to earn passive income
  • Low interest rates compared to conventional loans
  • Flexible loan terms
  • No decision bias as the system is governed by smart contracts
  • All transactions are automatically recorded on a blockchain

Disadvantages of Crypto Loans

  • Illiquidity
  • Largely unregulated
  • High collateral requirement
  • Smart contracts and lending platforms are susceptible to cyber attacks
  • High risk of liquidation
  • Deposits/collateral are not insured

Is Crypto Lending Safe?

Indeed, crypto lending holds some risks for lenders and borrowers alike, but it’s nothing out of the ordinary. In fact, it is one of the safest investment ventures considering that loans are backed by collateral and the process is controlled by smart contracts.

Things To Consider Before Getting A Crypto Loan

Before taking a crypto loan, customers are strongly advised to do due diligence checks, especially when it comes to choosing the right lending platform or lending program. Once you find yourself a good crypto lending platform, you must get the right education to ensure you understand all the risks involved. Another thing to consider before taking a crypto loan is the outlook of the crypto market. Also, ensure you read and understand the terms and conditions of the loan before taking it. And lastly, try to compare loans offered by different lending platforms before making your final decision.

Conclusion

Crypto lending and crypto loans sound like exciting concepts, and indeed, they are. They save you the time and hassle you’d normally have to endure when borrowing funds from conventional lending platforms. For one, you wouldn’t have to fill out forms and wait for several days for your loan to be approved. And it’s needless to say you can make a good passive income from lending cryptocurrency.

But of course, as an investor, you must ensure that you properly understand the risks attached to lending and borrowing volatile assets like cryptocurrencies.

Also, it is important to study and understand the terms of the loan you’re applying for as well as the rates that your lending platform is offering.

Frequently Asked Questions

1. What Is Cryptocurrency Loan?

A cryptocurrency loan is any loan that’s backed or hedged against crypto assets. In other words, to obtain a crypto loan, the borrower must deposit their crypto holdings with the lender as security.

2. How To Get A Crypto Loan?

Getting a crypto loan isn’t as hard as you might think. In fact, the entire process from start to finish generally takes less than 30 minutes.

3. What Are Cryptocurrency Lending Platforms?

Cryptocurrency lending platforms are companies that act as an intermediary or middleman between the lender and the borrower. These platforms do not directly fund crypto loans per se. Rather, they issue assets that have been deposited by lenders as loans to borrowers who are expected to pay them back with interest.

4. How Can I Make Money Lending Crypto?

Lending cryptocurrency is a good source of income for investors who don’t have time to trade tokens. All you need to do is deposit your funds with a lending platform and watch your interest accumulate.

5. How To Get A Loan Against Crypto?

To get a loan against crypto, first you have to register with a crypto lending platform and complete KYC verification (if required). Following that, deposit crypto asset(s) as collateral with the lending platform and subscribe to any of the available crypto lending programs based on your loan-to-value (LTV) ratio.

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