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12 Best Crypto Lending Platforms in 2024

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Lending and borrowing are the central services offered at centralized banks. However, with the advent of cryptocurrency, people have options outside the confines of mainstream finance. Plenty of online platforms help clients lend and borrow digital assets at fixed interest rates. 

Although crypto lending platforms don’t enjoy the same protections as FDIC-backed banks, some customers may prefer the speed and convenience of dealing with crypto. But before you start transferring your precious Bitcoin into a lending protocol, you should have a solid understanding of your platform’s track record.

TL;DR

  • Best Overall— BlockFi
  • Best for Instant Loans — Nexo
  • Best for Security Features  — Crypto.com
  • Best for Multi-Chain DeFi Lending  — Aave
  • Best for LTVs on collaterals  — YouHodler
PlatformMin. Loan AmountLoan DurationLearn more
BlockFi$10,000
12 months
Learn More
Nexo$50 stablecoins and $500 fiat currency12 months Learn More
Celsius Network$100 stablecoins or $1,000 fiat currencyN/A Learn More
Binance$1Up to 180 days Learn More
CoinLoan$100Up to 36 months Learn More
Aave$1Unlimited Learn More
CoinRabbit$100Unlimited Learn More
YouHodler$100Up to 360 days Learn More
Compound$1Unlimited Learn More
MoneyToken$200Up to 90 days Learn More
MakerDAO$1Unlimited Learn More
Crypto.com$10012 months Learn More

Best Crypto Lending Platforms

Crypto lending platforms come in various shapes and forms. Some offer better rates than others, but it all comes down to your personal preference.

1. BlockFi: Best For US Compliance And Safety 

BlockFi Lending
Source: BlockFi

Headquartered in New Jersey, BlockFi is one of the best-known crypto lending platforms in the USA. Although BlockFi has been in the headlines for a recent SEC lawsuit, it remains one of the most widely used and compliant centralized crypto lending platforms. BlockFi has 1 million clients and handles roughly $10 billion with the help of Gemini, Coinbase, and BitGo. 

Those interested in borrowing from BlockFi can use blue-chip cryptos like Bitcoin and Ethereum as collateral on 12-month loans of at least $10,000. BlockFi will deposit your loan on the same day and charge an APR of at least 4.5 percent plus a 2 percent origination fee. 

In addition to its loan platform, BlockFi offers a suite of financial services, including a crypto rewards credit card, a crypto trading portal, and interest-bearing accounts. For more details on BlockFi’s offerings, please read The Modest Wallet’s full BlockFi review

Features

  • Offers crypto-collateralized loans with a minimum amount of $10,000. 
  • Accepts Bitcoin, Litecoin, Ethereum, and PAXG for collateral.  
  • 50 percent LTV Ratio for crypto collateral.
  • APR as low as 4.5 percent (plus 2 percent origination fee). 
  • Partners with Gemini, Coinbase, and BitGo for crypto custody.

Pros & Cons

BlockFi is an industry leader in the crypto lending field with strong reputational trust. Thanks to its close partnership with Gemini, BlockFi is arguably the safest play for American investors. However, since BlockFi tries to be so compliant with US regulators, it tends to have more limited options for borrowing limits, interest rate terms, and altcoin selection. 

In A Nutshell

  • Borrow up to 50% of the value of your crypto
  • Borrow money at rates as low as 4.5% APR
  • All major tokens supported
  • There are no prepayment penalties or fees
BlockFi

on BlockFi’s website

2. Nexo: Best For Customers Who Want A Wealth of Features & Currencies

Nexo Loans
Source: Nexo

Nexo is a European-based lending platform with a global user base of 3 million. A significant reason behind Nexo’s success is its wealth of features and currencies. Nexo accepts dozens of cryptocurrencies and NFTs as collateral, and it supports 40 fiat currencies. You could even take out loans of as little as $50 in stablecoins from Nexo. 

Customers should keep in mind many of Nexo’s advertised LTVs, APRs, and interest rates are only available to those who buy and store the NEXO altcoin. However, Nexo guarantees its APR rates will never exceed 13.9 percent. The company holds $375 million with its partners BitGo and Ledger Vault for insurance. 

Please read The Modest Wallet’s full Nexo review for more details. 

Features

  • APR rates between 0 and 13.9 percent. 
  • Over 20 cryptocurrencies and blue-chip NFTs are accepted as collateral. 
  • Over 40 fiat currencies available. 
  • Offers loans between $50 and $2 million.
  • No origination fees. 
  • $375 million in crypto insurance. 

Pros & Cons

Nexo is a feature-rich platform with attractive interest rates on dozens of stablecoins and altcoins. However, the APR rates can be steep if you don’t use the NEXO token rewards system. Also, many of the features Nexo offers to international clients still aren’t available to US residents. On the positive side, Nexo has partnerships with the leading names in crypto custody and $375 million in insurance. 

In A Nutshell

  • Borrow without selling your crypto at rates starting from 0% APR
  • Get funds instantly and no credit checks
  • No originator fees or monthly repayments
  • Available from $50 up to $2M
Nexo Logo

on Nexo’s website

3. Celsius Network: Best For High-Interest Rate Rewards 

Celsius Loans
Source: Celsius

Important Notice

Due to extreme market conditions, on June 13, 2022, Celsius paused all withdrawals, swaps, and transfers between accounts. Read the Celsius announcement to learn more.

Along with BlockFi and Nexo, Celsius is one of the top-tier CeFi crypto lending platforms. Created in 2017 by Alex Mashinsky, the Celsius Network offers exceptional flexibility for its crypto-backed loans. Not only are there 40 digital assets accepted for collateral, you could adjust the APR and LTV to your risk tolerance. At the low end, you could take out as little as $100 for an APR of 1 percent and an LTV of 25 percent. 

Also like Nexo and BlockFi, you can find secondary features like interest-bearing accounts and an upcoming credit card. Celsius also has a reputation for offering some of the highest interest returns. Just bear in mind that many of the high-end interest rates are in Celsius’s native cryptocurrency CEL.

Please read The Modest Wallet’s full Celsius review to find out more about the Celsius Network.  

Features

  • Over 40 crypto assets are available for collateral. 
  • Loans start at $100 for stablecoins and $1,000 for USD. 
  • Adjustable LTVs of 25, 33, and 50 percent. 
  • APR of 1, 6.95, or 8.95 percent. 
  • Weekly interest payments in Earn account. 
  • No origination fee. 

Pros & Cons

Celsius shares many of the strengths of BlockFi and Nexo, but it tends to outshine them in its higher-than-average interest returns and customizable borrowing rates. On the downside, Celsius isn’t as feature-rich as other CeFi lending platforms. Also, US customers still can’t take full advantage of all of Celsius’s features. 

In A Nutshell

  • Borrow starting at only 0.1% APR
  • All major crypto assets supported as collateral
  • No gas, transfer, withdrawal, holding or origination fees
  • Offers loans between $50 and $2 million
Celsius Network

on Celsius’ website

4. Binance: Best For Pro Crypto Traders Outside the USA

Binance Loans
Source: Binance

Binance began business in 2017, and since then it has taken over the crypto exchange industry. Although Binance is best-known for its centralized trading platform, it also offers crypto-backed loans to any customer who already has an account. You can use roughly 40 cryptos as collateral with LTVs of 60 – 65 percent. The lowest amount you could receive in a loan is $100 in stablecoins. 

Interestingly, Binance calculates your interest at an hourly rate for your term. You can choose from many payment periods of as little as one week or up to 180 days. 

As a perk, you could instantly deposit staked cryptocurrency on Binance’s platform to contribute to your loan payments. Also, Binance offers margin lending services, but this should only be used by advanced traders who understand the risks of margin trading. Read our full Binance review to learn more.

Features

  • 60 – 65 percent LTV Ratio on crypto collateral.
  • Dozens of tokens available for collateral and loans. 
  • “Loan Staking” instantly adds staking rewards to interest payments. 
  • Repayment terms between 7 – 180 days.
  • Loans available as little as $100 in stablecoins. 
  • Margin Loans for advanced traders.  

Pros & Cons 

Binance is the largest player in the crypto exchange game with robust security features and a wealth of altcoin options. However, this platform isn’t ideal for crypto beginners or American customers. Binance only offers its subsidiary Binance.us in America, and there aren’t as many features for American clients. Therefore, Binance Lend is best-suited for intermediate to advanced traders outside the USA. 

In A Nutshell

  • Repayment terms between 7 – 180 day
  • Borrow for sport/margin/futures trading or staking
  • Interest calculated hourly
  • No transaction fees
Binance

on Binance’s website

5. CoinLoan: Best For European Customers Who Want High Compliance Standards 

CoinLoan Screenshot
Source: CoinLoan

Although CoinLoan offers its platform worldwide, it has a decidedly European focus. Headquartered in Estonia, CoinLoan has secured many official accreditations, including European Financial License FVT000114 and a European Trademark from the EU IPO. CoinLoan also has partnerships with SEPA and SWIFT to make it easy for Europeans to send fiat into their accounts. 

CoinLoan allows customers to adjust the LTV on their crypto collateral between 20 and 70 percent at interest payment rates of 4.95 to 11.95 percent (plus a 1 percent origination fee). You could also adjust the loan period between as little as one month to three years, and there are about a dozen cryptos available. 

Aside from borrowing crypto, CoinLoan has interest-bearing accounts, a CLT token for extra perks, and an in-built trading feature. 

Features

  • Choose LTV for collateral of 20, 35, 50, or 70 percent.  
  • About a dozen cryptos offered for collateral, trading, borrowing, and earning.  
  • Mobile app for iOS and Android.
  • Alarm push notifications for margin call alerts. 
  • 1 percent origination fee. 

Pros & Cons

In many ways, CoinLoan is the European equivalent of America’s BlockFi. While CoinLoan and BlockFi offer relatively lower yields and a more limited altcoin selection versus Nexo and Celsius, they are better options for those most interested in transparency and compliance. CoinLoan will most appeal to European customers due to its high compliance standards in the EU. 

In A Nutshell

  • Instant loan approval process
  • No paperwork or credit history checks
  • You don’t have to pay interest for a year if you repay your loan faster
  • No lock-in fees
CoinLoan

on CoinLoan’s website

6. Aave: Best People Who Want a Multi-Chain DeFi Platform 

Aave Loans
Source: Aave

Originally called ETHLend in 2017, Aave has grown to become one of the most successful decentralized lending platforms. According to the Aave team, there’s now $21 billion locked in this open-source lending market. Also, Aave frequently undergoes public audits to verify it’s a trustworthy DeFi site. 

Like other DeFi lending sites, Aave uses “liquidity pools” to provide loans to borrowers. Anyone could connect a wallet like MetaMask to provide crypto to one of these pools and earn interest. You could also pull crypto out of an Aave liquidity pool if you put up collateral and pay back the interest. 

Although Aave is built on Ethereum, it continues to expand its number of supported chains. For instance, Aave now supports many Layer 2 Ethereum chains like Polygon and Optimism. You could also use Aave with Harmony, Fantom, and Avalanche. Aave’s wide range of options, high degree of trust, and relatively simple interface make it a great choice for those interested in multi-chain lending & borrowing. 

Features

  • Open-source code and frequent audits. 
  • Borrow or lend crypto for fluctuating interest rates and LTVs. 
  • Staking opportunities for AAVE token holders. 
  • Decentralized governance with AAVE token. 
  • Available on six blockchains, including Ethereum, Fantom, Avalanche, and Harmony. 
  • High-risk “flash loans” are available for arbitrage traders.    

Pros & Cons

Aave has a solid reputation in the DeFi space for being an exemplar of decentralized governance and open-source code. However, there are concerns some of Aave’s features (e.g., “flash loans”) may put it under severe regulatory pressure. Also, there’s speculation Aave will start introducing KYC as it tries to entice more institutional clients. 

Still, given Aave’s size and reputation in the DeFi space, it’s the safest option for people who want access to multi-chain DeFi lending. 

In A Nutshell

  • Ethereum-based tokens supported
  • Staking opportunities for AAVE token holders
  • Interest rate is derived from the supply and demand ratio of the asset
  • The maximum amount you can borrow depends on the value you have deposited and the available liquidity
Aave

on Aave’s website

7. CoinRabbit: Best For High-Risk Investors Who Want Zero KYC & High Yields

CoinRabbit Screenshot
Source: CoinRabbit

CoinRabbit is a new crypto lending protocol headquartered in St. Vincent and the Grenadines. Founded in 2020, this website allows customers to use about 40 cryptos as collateral and receive one of roughly ten stablecoins or large-cap cryptos. 

People can take out loans as low as $100, and you can choose collateral LTVs of 50 or 70 percent. While there’s no “due date” to pay off your loan, CoinRabbit will keep charging its flat 14 percent APR monthly till you pay it off. 

People who choose to lend crypto on CoinRabbit will enjoy 10 percent compound interest. The company claims it has high security standards and uses Guarda for its asset storage. However, since CoinRabbit is a relatively new protocol, investors should have a higher risk tolerance if they want these higher yields. 

Features

  • Dozens of crypto collaterals supported, and about ten currencies available for borrowing. 
  • LTVs of 50 or 70 percent on collateral. 
  • No KYC to sign up. 
  • 10 percent compound interest for lenders. 
  • 14 percent APR on loans. 
  • 24/7 live chat. 
  • No origination fee. 

Pros & Cons

CoinRabbit doesn’t have as long of a track record as other crypto lending platforms, and it isn’t as transparent about its operations. While the company offers live chat and claims to partner with companies like Guarda, it’s not the best choice for people who need sterling compliance standards. However, people who want to earn interest or borrow without giving over their KYC may find CoinRabbit’s offerings attractive. 

In A Nutshell

  • Loans starting at $100
  • No KTC or credit history checks
  • 71+ coin available as collateral
  • Get crypto loans in BTC, ETH, ADA, SOL, USDC, USDT and more
CoinRabbit

on CoinRabbit’s website

8. YouHodler: Best For Non-US Investors Who Want Flexibility & High Yields 

YouHodler Screenshot
Source: YouHodler

Based in Switzerland, YouHodler is a centralized crypto lending platform that has been around since 2017. YouHodler has attracted a lot of attention for its attractive interest-bearing accounts, which currently have over 12 percent APY for stablecoins. While Nexo and Celsius have similar rates, YouHodler doesn’t require customers to use a proprietary altcoin to earn its highest yields. 

As for loans, YouHodler accepts roughly 40 tokens and even a few NFTs as collateral. It also offers LTV of as high as 90 percent and flexible term schedules for most assets (plus term extensions for a fee). The minimum loan withdrawal is $100, and you can monitor your interest payments on iOS and Android devices. 

For those who don’t mind taking on additional risk, YouHodler has Turbocharge and Multi-HODL Wallet options. However, please know that these strategies will expose you to more risk because you’ll use your borrowed tokens to double your crypto. Read our full YouHodler review to learn more.

Features

  • Accepts 40 coins as crypto collateral.
  • LTV of up to 90 percent on collateral. 
  • Interest rewards above 12 percent on stablecoins. 
  • Small NFT market and option to use NFTs as collateral. 
  • Turbocharge and Multi-HODL Wallet let you buy crypto with borrowed assets. 
  • $150 million in crime insurance with Ledger Vault. 

Pros & Cons

YouHodler isn’t available in the USA, so it’s most popular nowadays with European investors. Compared with CoinLoan, YouHodler offers more attractive interest rates for lenders. However, YouHodler doesn’t appear to have as many accreditations. Non-US residents interested in high yields should investigate YouHodler further. 

In A Nutshell

  • Over 50 coins available as collateral for crypto loans
  • Get loans in EUR, USD, CHF, GBP, or even stablecoins or crypto
  • Withdraw instantly to credit cards, banks, or exchanges
  • Loan to Value (LTV) of up to 90%
YouHodler Logo

on YouHodler’s website

9. Compound: Best For New DeFi Investors 

Compound Finance Screenshot
Source: Compound

Compound Finance is a decentralized money market that shares many similarities with Aave. Both of these protocols are on the Ethereum blockchain, and they allow users to borrow and deposit funds without KYC requirements. All you need to use Compound is an Ethereum-compatible wallet (e.g., MetaMask) and one of the ~ 20 Ethereum-based assets available on the site. 

Compound has a decentralized structure thanks to the COMP governance token. People who interact with Compound can get COMP rewards and stake these tokens for passive income. People who loan to Compound also get “cTokens” related to their deposit, each of which represents your underlying asset (e.g. cETH for Ether). 

Features

  • Deposit or borrow roughly 20 Ethereum-based crypto assets. 
  • Decentralized protocol with zero KYC requirements. 
  • COMP token rewards for borrowers and lenders. 
  • Stake COMP tokens for passive income. 
  • Higher risk yield farming options are available.

Pros & Cons

Compound has a sterling reputation for safety thanks to its many audits and partners with Ledger, Circle, and Coinbase. While Compound may not have as many features or integrations as Aave, it has an intuitive interface and exceptional trust in the crypto industry. These features make Compound a solid choice for new DeFi investors most interested in Ethereum. 

In A Nutshell

  • Ethereum-based tokens supported
  • Decentralized protocol with zero KYC requirements
  • Stake COMP tokens for passive income
  • COMP token rewards for borrowers and lenders
Compound

on Compound’s website

10. MoneyToken: Best For A Combination of Centralized & Decentralized Lending 

MoneyToken Screenshot
Source: MoneyToken

MoneyToken is a smaller crypto lending project that began business in 2018. While this site uses blockchain tech for lending & borrowing, it isn’t KYC-free. People who use MoneyToken have to submit detailed info and create an account to take advantage of their services. 

The company now claims to have over 85,000 members, and it has a prominent partnership with Bitcoin.com’s Roger Ver. Once people are on MoneyToken, they could take out a loan with Bitcoin or Ethereum, or deposit crypto assets for yields of up to 10 percent. MoneyToken also has an IMT altcoin that you could use for interest payment reductions and other perks.

While MoneyToken offers OTC and margin trading, you need to get a verified VIP account. Currently, the minimum amount for crypto exchanges on MoneyToken’s trading platform is $50,000. 

Features

  • Interest payments start at 10 APY for borrowers. 
  • Max of 10 percent interest for lenders. 
  • Accepts Bitcoin and Ethereum collateral. 
  • Receive loans in Bitcoin, Dai, Ether, or USDT. 
  • Use IMT tokens for discounts and other perks. 
  • Decentralized exchange and margin trading for VIP clients. 

Pros & Cons

MoneyToken isn’t as well-vetted as other centralized or decentralized platforms. It also has a limited selection of tokens. However, people who want a clean UI and only deal with stablecoins, Bitcoin, and Ethereum might like the simplicity of MoneyToken’s set-up. Just keep in mind MoneyToken isn’t as well-known as other names in the industry. 

In A Nutshell

  • Instant loans with zero fees
  • Repay your loan with IMT to get interest rate discount (only for loans up to 10,000 USDT)
  • Deposit your IMT to get more interest as a lender
  • Fully decentralized lending
MoneyToken

on MoneyToken’s website

11. MakerDAO: Best For Pro DeFi Traders 

MakerDAO Screenshot
Source: MakerDAO

MakerDAO is a decentralized organization best known for creating the Dai stablecoin. Unlike centrally-issued stablecoins like USDC, MakerDAO doesn’t hold physical dollars to back Dai’s value. Instead, MakerDAO primarily uses locked Ethereum assets from borrowers and lenders to give Dai its stable value. 

MakerDAO allows people to generate and borrow Dai using the Oasis app. Anyone can connect their MetaMask and open a Maker Vault to take advantage of this borrowing mechanism. 

There are several accepted Ethereum collateral options, including Ether, Wrapped Bitcoin, and Uniswap. The minimum collateral ratio for most assets is ~ 165 percent, but it’s best to keep your percentage well above to avoid liquidation. You also have to look at the current stability fee with whatever Maker Vault you want to open. You’ll have to pay back your Dai plus the stability fee, and this percentage will fluctuate depending on market demand. 

MakerDAO uses a one-hour delay in its price feeds as a security mechanism. This will give you extra time to add more collateral or repay more Dai during a sudden market crash. 

Features

  • Borrow Dai stablecoin with Ethereum-based collateral (e.g., ETH, WBTC, or BAT). 
  • No set repayment schedule. 
  • No KYC. 
  • Risky “Multiply” feature lets users buy more collateral with Dai loans. 
  • Oracle Security Module uses delayed price feed to help avoid liquidation. 

Pros & Cons

MakerDAO has a long track record in the DeFi space, and the interface of the Oasis app is very intuitive. Although there are many assets available for collateral, please keep in mind you can only withdraw Dai. For this reason, MakerDAO is typically best suited for people who are active in Ethereum-based DeFi trading. If you’re not going to use Dai, then the fees you’ll pay for conversions may defeat the purpose of borrowing this coin. 

In A Nutshell

  • Borrow Dai stablecoin with Ethereum-based collateral
  • Decentralized protocol with zero KYC requirements
  • No set repayment schedule
  • Oracle Security Module
MakerDAO

on MakerDAO’s website

12. Crypto.com Lend: Best For Ease of Access To Dozens of Crypto Services

Crypto.com Loans
Source: Crypto.com

Singapore’s Crypto.com has become one of the most popular crypto exchanges, thanks in no small part to its numerous features. Customers who can access Crypto.com’s Exchange will notice this company now offers a Lend platform. 

Similar to Binance, Crypto.com allows users to borrow dozens of crypto assets and accepts dozens of tokens as collateral. On Crypto.com Lend, you can choose an LTV of 25, 33, or 50 percent. Crypto.com says it will start charging interest daily, and customers must pay all loans within at least 12 months. To help bring down your payments, you could stake Crypto.com’s CRO tokens. 

Editor’s Note

Crypto.com Lend isn’t available on the popular Crypto.com mobile app. You need to be living in a country where the Crypto.com Exchange is allowed. Currently, this service isn’t available in the USA.

Features

  • Dozens of crypto assets are available for borrowing and lending. 
  • 25, 33, or 50 percent LTV for collateral. 
  • Max of three active crypto loans at any given time. 
  • Stake CRO tokens for more attractive rates. 
  • All loans last for 12 months. 

Pros & Cons

Crypto.com has a solid reputation for security, ease of use, and attractive fees. These pros spill over into its Lend offering, which easily integrates with an active Crypto.com account. However, since this is a big exchange, you need to be willing to hand over KYC info. Also, even if you can access Crypto.com Exchange, you’ll have to invest in CRO tokens to get the best deals. 

To learn whether the positives of Crypto.com’s ecosystem outweigh these cons, please read Modest Wallet’s full Crypto.com review

In A Nutshell

  • Borrow up to 50% of your crypto collateral
  • Pay back on your own schedule
  • No credit check required
  • Instant loans available
Crypto.com

on Crypto.com’s website


What To Look For In A Crypto Lending Platform

Choosing where to lend your crypto is a big decision. Whether you use your tokens as collateral or deposit them into an interest-bearing account, you must feel confident your platform is safe and offers the services you need. Here are a few features to consider as you evaluate different crypto lending platforms. 

Security Features 

Security should be the top consideration when choosing a crypto loan website. With centralized loan issuers, you should look for official accreditations, secure crypto storage, and insurance policies. Secure DeFi platforms should always have open-source code and plenty of audits. 

Users should also consider what features their platform offers to mitigate the risk of hacks or liquidation. For instance, can you enable 2FA to get into your account? Will your platform send you SMS notifications if you’re in danger of a margin call? Ideally, your crypto loan platform will put all of these security measures in place. 

Interest Rates 

Whether you’re a borrower or a lender, you’re going to deal with interest. On the borrowing side, you must know how much your provider will charge for your crypto loan. For lenders, you should shop around for the most attractive interest rates. 

Also, always remember that the posted interest returns usually aren’t the “base rates.” In many cases, you need to invest in the platform’s cryptocurrency to take advantage of high-interest rewards. If you see absurdly high returns on your tokens, there’s probably a higher degree of risk involved. 

Supported Cryptocurrencies 

Some crypto loan platforms are willing to take speculative altcoins and NFTs as collateral, while others only accept a few blue-chip tokens. You’ll also find that each platform offers different crypto and fiat currencies for your loan. Please see if the tokens you want to use are on your chosen platform. 

Fees, Limits & Collateral 

Often, crypto platforms charge fees on top of the interest you’ll pay for a loan. These may come in the form of an initial “origination fee” or gas fees on DeFi protocols. Be sure to factor these rates into your financial plans so you know how much you’re paying.

While examining a site’s fees, please understand what you need to pay and when you need to pay it. Also, know the percentage of collateral you must keep in your account to avoid margin calls and liquidations. 

Loan Terms 

If you don’t fully understand your obligations as a borrower, then you should hold off putting up crypto as collateral. Most significantly, you need to know how much collateral you need in your account to avoid margin calls and liquidation. Please also be sure you know when you need to pay off your loan to meet your agreement. 

Platform Track Record 

The crypto industry may be young, but plenty of brands have already gained a reputation in the lending space. Read the backstory of each crypto loan site you’re interested in. See if there are any big backers for this company, and note any significant issues in the past. For optimal security, choose a company with years of experience, a large client pool, and a clean record. 

Customer Support 

One of the benefits you should expect with a CeFi crypto lending platform is high-quality customer service. In exchange for your KYC data, you should get access to ticketed support, live chat, or phone calls with your loan provider. 

You may want to send your company’s help desk a few questions before opening an account to test its efficiency. Customers could also look up verified reviews of different crypto loan providers on sites like TrustPilot. 

Editor’s Note

While DeFi loan sites don’t have customer care divisions, they usually have official forums where you can ask questions. Be sure you know what sites to go on if you have questions about using a decentralized platform.


Types of Crypto Lending Platforms

Crypto loan platforms fall into two categories: centralized finance (CeFi) and decentralized finance (DeFi). Customers should know the major features of these options to figure out which better fits their risk tolerance. 

CeFi Platforms 

CeFi platforms are easier for newcomers to understand because they mimic traditional banks. Companies like BlockFi, Celsius, and Nexo are the central authorities that loan out crypto. These companies also lend the crypto people deposit on their platforms to generate interest. Those who lend crypto on a centralized platform will get a cut of that interest rate paid out daily, weekly, or monthly. 

Centralized crypto lending sites don’t have federal protections, but reputable ones usually carry insurance policies in case of a hack or theft. You should also be able to contact customer service with one of these platforms. However, you’ll have to give over KYC data and complete anti-money laundering (AML) forms to enjoy these extra protections. 

DeFi Platforms 

DeFi lending platforms are at the cutting edge of financial technology. Protocols like MakerDAO, Compound, and Aave operate strictly on smart contracts and code. There’s no official “company” or customer care division to get in touch with. Instead, all decisions made on decentralized protocols are put forward by community members who vote with governance tokens. 

Most of these sites generate their funds with “liquidity pools,” which are huge amounts of crypto people lend to the protocol. In exchange for this service, lenders receive a cut of the interest DeFi platforms get from borrowers. When people borrow from DeFi protocols, they will trigger a smart contract, which should automatically handle your loan agreement according to your terms.  

Some people love the anonymity DeFi protocols provide. You don’t need to fill out KYC or AML to use these services — all you need is crypto and a compatible wallet. However, you’ll enjoy fewer protections on DeFi versus CeFi. Although protocols like Compound and Aave are open-source, glitches happen. In the event of a issue, you won’t enjoy the insurance guarantees of some CeFi platforms. 


FAQ Best Crypto Lending Platforms

Are you still bewildered by Bitcoin-backed loans? Hopefully, these concluding FAQs will address your concerns. 

What Are Cryptocurrency Loans? 

Crypto loans are the same as traditional bank loans, except borrowers use digital assets as collateral. After depositing the agreed-upon crypto collateral, a borrower can receive a percentage of crypto of fiat into their account. The borrower then has to pay off the principal plus interest before their term expires, all while ensuring their collateral stays within the agreed-upon range. 

How Does Crypto Lending Work? 

The basic structure of getting a crypto loan is similar to traditional lending. First, you deposit crypto as collateral. Next, you’ll receive your loan amount in your account. You could do whatever you want with your loan, but you’ll have to pay it back with interest in the agreed-upon time horizon. 

However, since crypto assets are so volatile, you always need to put up more collateral than you want to borrow. By “overcollateralizing,” you reduce the risk of your crypto meeting the liquidation threshold. 

By the way, you don’t need to show your credit score to get a crypto loan. However, you will need to fill out KYC and AML paperwork to use a centralized platform.  

What Are The Risks of Crypto Lending?

Volatility is the top risk when taking out a crypto loan. While crypto is a highly liquid asset, it doesn’t provide the price stability of more established assets used as collateral (e.g., a home). For this reason, you always need to put up more crypto as collateral to take out a loan. 

While over-collateralization helps reduce liquidation risk, it doesn’t eliminate this possibility. Indeed, it’s pretty standard for people who take out crypto loans to get warnings or margin calls. You’ll need to constantly monitor the crypto market and double-check your collateral falls within the accepted range. 

Typically, it’s safest to take out a crypto loan with a short time horizon. The longer you wait, the more time crypto prices have to go on wild rides.

Are Crypto Loans Regulated? 

Cryptocurrencies aren’t regulated by any central authority. However, centralized crypto loan providers usually work with local legislatures to ensure they meet KYC and AML requirements. 

DeFi is still in a “Wild West” phase, but regulators are trying to figure out how to manage this emerging industry. Customers should understand their local government’s stance on crypto lending before deciding which platform is right for them. 

Are Crypto Loans Insured? 

No central bank issues cryptocurrencies, so crypto loans aren’t federally insured. However, some platforms carry insurance as a part of their policy. Just keep in mind these insurance protections aren’t backed by the state or legally binding. If a CeFi platform goes bankrupt, it’s probably not going to make good on its insurance policies.    

Is Crypto Lending Safe? 

There will always be risks involved when lending an asset, including crypto. Since crypto is new and volatile, it is riskier than taking out a standard fiat loan. Also, since DeFi platforms run on code, there’s less protection in the event of a hack.

However, there are degrees of risk depending on what platform you choose to use. If you stick with a crypto loan provider with years of experience, audits, and accreditations, you’ll reduce the odds of dealing with a significant issue. 

You also have to weigh the positives of crypto lending against its higher risk profile. For instance, crypto loans are instant and don’t require credit scores. In the case of DeFi, you don’t even have to submit KYC paperwork to get a loan in seconds. These features may outweigh the risks of using crypto as collateral. 

What Are The Requirements To Take Out A Crypto Loan? 

If you’re on a CeFi platform, you can usually take out a crypto loan if you submit the required KYC and AML paperwork. For DeFi loan providers, you just need to connect a wallet like MetaMask to your chosen site and deposit crypto into your account. 

How Are Crypto Loans Taxed? 

Traditional fiat loans aren’t taxed, and most financial professionals believe crypto loans are non-taxable events. However, since the crypto industry is so new, it’s advised you always speak with a tax professional about all your crypto activities. Only a professional accountant could tell you whether you owe anything to the IRS. 

What Is Loan To Value (LTV)? 

Loan to Value (LTV) refers to the percentage of cash you’ll receive as a loan for your collateral. For instance, if the LTV is 25 percent, you’ll receive 25 percent of your collateral in the form of a loan. In other words, if you put up 400 USDT at a 25 percent LTV, you’ll get 100 USDC in your loan. 

The formula to calculate an LTV is as follows: LTV = Total Loan Amount ÷ Collateral Value. In the example above, the calculation would look like this: 100 USDC ÷ 400 USDT = 25 percent. 


Final Thoughts

Crypto-backed loans are a fantastic example of using blockchain tech to give customers more financial opportunities. True, crypto loans aren’t as “battle-tested” as centralized banks, but they offer new possibilities TradFi can’t provide. 

Just remember that even the best crypto loan providers can’t protect you from price volatility. Take your time evaluating different loan providers’ stipulations, and be sure you know how much collateral you need to avoid liquidation. If you don’t feel comfortable constantly monitoring your portfolio, then crypto loans probably aren’t the best fit for your situation.

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