Have you ever thought about getting a crypto loan? There are plenty of exchanges and other platforms out there which provide loans either paid in crypto or else delivered in fiat currency and backed by a deposit of crypto collateral.
You’ll find that interest rates with these loan apps can range anywhere from 0% to 50%. With so many lenders to choose from, though, it can be hard to know where to start!
But are crypto loans safe? Do self repaying loans exist when it comes to Bitcoin or another crypto asset? Do you need to worry about a capital gains tax with crypto loans?
This handy guide will answer these questions and more! In addition, we’ll talk you through nine of the best places to get a crypto loan. We’ll also reveal one of the best crypto loan providers as a bonus!
Why apply for a crypto loan? Compared to traditional bank loans, you’ll find crypto loans or crypto-backed loans can often accrue some of the lowest interest rates. Crypto lenders may also offer fewer barriers to entry. For example, some lenders won’t require AML or credit checks, like banks do.
The process itself is easy. First, you’ll need to choose your preferred lending platform out of the many available. To help you, we’ll cover some of the best ones below. In many cases, you won’t even need a bank account to get started. Instead, create an account with the lender’s platform, and connect a crypto wallet.
Do always be sure to check the terms and conditions. Also, try to get a clear picture of the fee and interest structure. Some of the sites listed here feature a loan calculator, which makes it extremely easy to see how the numbers will play out over the course of your borrowing.
Once that is all agreed upon, it’s time to deposit your collateral in the form of crypto tokens. While there are a few crypto lenders out there who don’t require collateral, you’ll find the majority do.
With all that done, you’ll be able to take your loan. Most of the lenders mentioned here have their own mobile app. Alternatively, they may have another platform where you’ll be able to login and retrieve it. In some cases, loans for crypto will be processed in a matter of hours. Others will appear on your balance immediately.
However, before we begin, it’s worth pointing out a crucial reminder about crypto itself. Whenever buying crypto, it’s vital that you opt for a well-liked exchange that’s popular amongst crypto experts. Take Coin GPT, for example. This promising platform connects you to some of the most popular crypto brokers on the market. What’s more, it also provides you with a range of cutting-edge tools to help you revolutionise how you trade digital currencies.
CoinRabbit is probably going to be one of the best-known names on this list – and for very good reason. It’s one of the safest crypto lending platforms around. How come? Well, it offers secure wallet storage and a clever system that allows users to earn passive income on their savings.
Those crypto savings can also be used as collateral against loans. The latter can be given at either 50%, 70% or 80% LTVs (or “loan to value”). The fact that customers won’t be asked for credit checks or for KYC (what’s known as a “know your client” check, and is customary on opening an account with a traditional bank, for example) makes the platform all the more accessible to new users. Interest is calculated monthly, and customers can borrow anywhere from $100 to one hundred million. To close the loan, customers simply need to repay the amount borrowed plus the APR. After this, their collateral will be returned.
CoinRabbit is one of the easiest places to get started if you’re looking for a crypto loan. It typically approves loans in less than 10 minutes and supports more than 70 crypto tokens. Lending rates will usually be between 12% and 16% APY.
Variable interest rate borrowing is the name of the game with Aave. This decentralised protocol focuses on smart contracts specifically. Users can borrow crypto without collateral, while there are some excellent benefits on offer for those in a position to lend. For instance, there are staked deposits earning incomes on track with some of the best market-based rates.
Borrowers on Aave will have no fixed term for the repayment of their loans. Additionally, they can swap borrowed crypto assets out for other cryptos midterm. Once again there’s no requirement for KYC checks here, and the onboarding process is a breeze.
One potential downside for some users, however, will be the fluctuating interest rates. While endeavouring to always deliver the market best, Aave’s rates can show more variance than some other platforms. As a result, that could make it harder to plan your finances here. Additionally, be aware that Aave only supports Ethereum-based tokens.
For loans of anywhere from €25 to €1 million, with some great flexibility for managing your portfolio, SpectroCoin is a platform that might be well worth your consideration. This wallet-cum-crypto exchange works like an all-in-one portfolio management toolkit, giving users access to more than 40 different cryptocurrencies. You’ll be able to buy tokens through the platform for fiat currency, or else stake your crypto savings as collateral against SpectroCoin’s crypto loans.
SpectroCoin is one of the best platforms here for fiat utility. Their debit card will let users convert their cryptos straight into euros, and withdraw them from an ATM – or else spend them with any Visa-friendly retailer. The platform also accepts payments for crypto using SEPA, Payeer, MasterCard, Skrill, and more.
Another positive point to SpectroCoin, is that the platform will let users have multiple loans active at the same time. Its rates are some of the lowest in the market, boasting competitive lending rates ranging from 4.95% to 13.45% (co-dependent on the amount borrowed, and also the agreed loan to value).
If you’re a crypto whale, someone who tends to move significant sums of crypto back and forth, then Celsius might be the option for you. With loans starting from 0.1% APY, Celsius has some of the lowest rates in the industry and it is specifically geared towards users looking to lend or borrow large sums.
Celsius offers variable terms, on loans ranging from 6 months to 60 months. You can set LTV at 50%, 33% or 25%, and automate the whole process of making interest payments within the map for hands-free utility. As a nice added bonus, California students are treated to 0% interest rates!
The Celsius base app gains extra utility from add-on services such as CelPay – allowing users to make no-fee crypto payments for goods and services – and also a dedicated Celsius Visa card which is good for regular ATMs and crypto transactions alike.
On balance, Celsius may not be the best option for smaller investors looking to take a quick loan either in crypto, or backed by crypto… but if you’re looking to move more serious quantities around, then Celsius really comes into its own at the higher stakes table, and if you’re an investor who’s also looking to stake some loans as well as borrowing, then signing up with Celsius is a no-brainer.
Not much of a gambler? Alchemix might be for you, then. With its DeFi protocol hard at work, Alchemix supports both borrowing and lending backed by collateral deposited in your choice of fiat, crypto, or stable coin currency. The service offers a flat rate LTV at 50%, and the system is designed so that loans automatically pay themselves back over time (using interest accrued on the collateral).
One of the biggest plus points of Alchemix’s unique approach is that there’s never any risk of liquidation, while the straightforward and transparent nature of the platform (with all LTVs locked at 50%) makes it an easy platform for managing and planning your loan with. All this makes Alchemix a great option for the patient, and the security-conscious investors.
Compound is a crypto platform that uses a decentralised protocol to support lending and borrowing with rates that vary for demand and supply. This is all determined by the algorithms – borrowers can apply for loans and then have interest rates set by the system based on the current demand and availability.
There are numerous great advantages to such a system. If you are looking for a loan, it is possible to find some excellent interest rates through Compound – depending on the token you choose, even as low as 0%. The platform uses its own native coin called COMP, and this makes it easy to add streamlined rewards into the system too. There’s also a low bar for entry here, with no KYC checks on sign-up.
The chief downside of Compound is that it may be harder to plan your finances with this platform – the algorithm will constantly adjust rates to match the market, and so you won’t necessarily be able to predict rates in advance. However, the market is always right, as they say. And if you’ve got the time and inclination, what Compound offers is at least an eminently fair system for lending and borrowing.
Gemini offers a system for lending and borrowing which is perhaps most suitable for institutions – wealth managers, corporations, fund managers, liquidity providers, traders and brokers, for example. It charges interest daily and includes a range of additional features, such as crypto credit cards, advanced orders, trading and charting.
Additionally, if you’re looking to lend then Gemini offers some excellent rates, such as 8.05% APY on your crypto staked through the app.
YouHolder gives users access to 58 of the most popular cryptocurrencies, and offers loans with a value as much as 90% of the collateral. Loans can be paid out in your currency of choice, including EUR, GB, USD, CHF, as well as Bitcoin and various Stablecoin options. This tech-friendly option comes with easy-to-use Android and iOS apps and there are unlimited loan terms available.
For those who enjoy hands-free and low-maintenance borrowing, the good news is that no weekly or monthly interest payments are involved. Rather, you simply pay off the whole sum at the end of the agreed term. With minimum loan amounts from $100, and APR from 50% to 85%, YouHodler makes it easy to start borrowing. Thus, it might be a good option for those with less experience in the world of crypto loans.
Are you looking for great rates on a short-term loan? Then CoinLoan might just have you covered. This platform offers a neat system where users can borrow without locking collateral. Loans are provided at values of 20%, 35%, 50%, and 70% LTV, over periods set between 1 month and 3 years.
You can pay back your loan in your currency of choice, picking between GBP or EUR, stablecoins or a range of some of the top cryptos. This is also a great choice for institutions seeking loans – with corporate interest rates starting at a very competitive 4.5%.
CoinLoan comes with a smart and easy-to-use app, there’s no lock-in and a lot of flexibility in setting the terms of your loan. However, it’s also worth being aware that, at present, users can borrow only up to 70% LTV, so it might not be the best option for those looking to leverage larger amounts of money for their collateral.
ZenGo appears as a bonus on this list largely thanks to its impressive versatility for lending. With more than 70 different cryptocurrencies on offer through this platform, users will be able to purchase tokens using fiat currencies, or else earn crypto by staking and lending. Additionally, by making use of WalletConnect, users will be able to connect to a wide range of third party dApps through ZenGo too.
With ZenGo, you can earn great APY – as high as 8% – simply by storing your crypto in your ZenGo wallet and then staking it to other lenders through their platform. Another way to earn some great APY is by staking through third-party protocols – and ZenGo works with quite a few, including Compound, dYdX, and Aave. Do note, though – ZenGo is not for borrowing, only lending, so you won’t be finding your crypto loan here.