Crypto loans offer an interesting alternative to traditional borrowing for anyone who has crypto assets. Crypto lending platforms allow users to borrow fiat currency against their cryptocurrency assets when they are needed, while simultaneously permitting investors who want to loan out their coins without selling them on the market and losing value through transaction fees and time constraints. If cryptocurrencies continue to rise in value relative to fiat currencies, these lending platforms will prove invaluable for both borrowers and investors. Here are some of the top crypto lending platforms you need to know about now:
BlockFi is one of the newest crypto lending platforms to enter the market, but it has already gained significant traction. BlockFi allows users to borrow USD against Bitcoin and Etherum deposits for terms of up to two years. Users can borrow at interest rates as low as 5% APR, which is only slightly higher than what most mainstream borrowers pay on their credit cards. This low-interest rate enables users to access funds without forcing them to sell coins that they believe will be worth much more by the time they need to purchase them back. The main reason why you should educate yourself on BlockFi is that they are constantly improving their services and adding new cryptocurrencies for the usage of their platform. So regardless of what coins you hold, you might get a loan you need on your favorite currencies.
YouHodler is a cryptocurrency platform built on blockchain technology that facilitates loans made against a user’s cryptocurrency assets that aren’t backed by a government or recognized as legal tender. For example, if a borrower has 10 Bitcoins but needs $2000 quickly for an emergency, they can borrow up to 80% of their Bitcoin holdings from YouHodler at 3% interest per week. If the price of Bitcoin has increased by more than 3% in that week, YouHodler automatically refunds the difference back to the user. The best thing about YouHodler is that they are one of the few crypto lending platforms that offer loans backed by crypto collateral, which results in lower interest rates for borrowers.
CoinLoan is a platform where users can borrow fiat currency against their cryptocurrency assets without needing to liquidate their crypto holdings. Users have an asset-backed lending (ABL) loan denominated in USD, EUR, or GBP starting from just 1 hour up to 12 months with relatively low-interest rates that are based on how long they want to keep it for. Interest accrued is paid out daily and can be prepaid at any time, plus CoinLoan also features collateral loans secured with Ethereum ERC20 tokens as well as cryptocurrency coins like Dash and Litecoin. They were also the first to offer peer-to-peer lending secured by cryptocurrencies and digital assets. So if you are looking for a crypto lending platform that offers both fiat and crypto collateral loans, CoinLoan is the right choice.
Nexo is a platform where cryptocurrency owners can borrow against their holdings instantly, without needing to liquidate them first. A user deposits their crypto assets into an account with Nexo and then chooses the amount they would like to borrow. Their loan gets deposited into their bank account within 30 minutes of being approved, which usually takes just two or three steps that are completed online in real-time. Nexo has no minimum amounts for loans and 0% fees on all transactions conducted on its platform, unlike some other platforms like Bitconnect. The absence of any hidden fees makes Nexo more transparent than similar lending platforms; in fact, users can see exactly how much interest they will pay before taking out the loan.
Celsius Network is a decentralized cryptocurrency platform that allows users to borrow fiat currency against their crypto assets deposited as collateral on the Celsius platform. This differs from other platforms like Nexo where cryptocurrencies are invested instead of being used as collateral, which means that lenders can’t use their capital for any other purpose until the loan has been paid off. Celsius allows users to lend out their crypto holdings to those in need and receive interest payments based on the amount they have lent out, with a 1% annual interest rate capped at $10 million per user. There are no fees involved when using the Celsius platform and money doesn’t have to be paid back immediately; borrowers can keep their funds for as long as necessary before either repaying the loan completely or reinvesting it with Celsius.
Binance is a platform that lends cryptocurrencies to users against their cryptocurrency assets as collateral, but only against the most liquid coins like Bitcoin (BTC), Ether (ETH), and XRP (XRP). Since these are some of the most popular cryptocurrencies on the market, many investors choose to use them as collateral for loans instead of less liquid ones like Litecoin (LTC) or Tron (TRX). A new feature added by Binance allows lenders to charge compound interest daily instead of borrowing money at once; lenders can increase their holdings by 200-300% if they keep reinvesting the profit they make every day. Additionally, Binance has no minimum or maximum investment limits, which means that users can borrow as little or as much money as they want.
Aave is a blockchain-based platform that enables borrowers to get access to loans using their digital assets like cryptocurrencies and tokens as collateral. It only requires the use of 5% of each asset’s value, which means that users can keep 95% of their crypto assets while still being able to access credit when they need it. The Aave Platform is designed so borrowers are never locked out from accessing emergency cash in fiat currency if necessary; lenders have an option to relax certain terms in case the borrower doesn’t pay for whatever reason, after which point they can receive their funds in full. The average loan on Aave is about $8,000, but there are no limits for how much an individual can borrow.
The future of crypto lending is looking bright, and these seven lending companies are surely leading the way. The ability to borrow against cryptocurrency for whatever purpose is really what will make the market thrive and continue to stay. So if you own some cryptocurrency and you think you need a loan, feel free to check out one of these lending platforms. You might be very pleasantly surprised by the outcome.