Crypto loans usually come from collateralising crypto assets. In traditional fiat currency loans, assets normally take the shape of a home or business. The main benefit of crypto lending is that you don’t have to sell any of your assets.
Given that most investments increase over time, you may not want to sell before they reach maturity. A loan does not involve a taxable event, so it won’t attract capital gains tax. In addition, forks which occur during the term of your loan may be passed back to you.
In some cases, you don’t need good personal credit or even a bank account. However, it can take a few days to get the go ahead, and your interest rates could be high, at least initially.
Loans are often used to invest in real estate. Other reasons include paying tax bills and financing different investments.