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How To Get An Instant Bitcoin Loan

Learn about instant Bitcoin loans and how to start borrowing without credit checks. Find platforms with as low as 1% APR and flexible repayment plans.

Cryptocurrency has revolutionized several financial processes, including how people take out loans. Crypto-based loans now offer more flexibility than traditional processes (which are often cumbersome and tiring for borrowers), making it easier for individuals with crypto holdings to access loans.

Typically, one would wait 45 to 60 days to get a bank loan; however, thanks to blockchain technology, borrowers can access funds a lot faster and at cheaper rates. Also, one does not need to go through approval processes that require identity verification, bank statements, credit history, and collateral, among other requirements.

However, despite the ease attached to this method of accessing funds, individuals still need to consider several factors before jumping in. Borrowers need a good understanding of how instant crypto-backed loans work, the necessary conditions, risks, the different platforms available, and their pricing and fee structures.

Here's what to know about instant Bitcoin loans for crypto holders looking for quick loans.

What Are Bitcoin Loans And How Do They Work?

A Bitcoin loan is a type of secured loan where one deposits crypto assets to access financing. It works just like traditional loans, where one can borrow cash and pay it back over a specified period with interest.

Although Bitcoin loans are similar to traditional loans since they allow borrowers to access the funds they need for urgent expenses, they are fundamentally different. Their main difference is in the collateral borrowers have to submit. While traditional financial institutions will require borrowers to pledge their cars, homes, or other physical assets, Bitcoin loans require only Bitcoin collateral.

Interestingly, Bitcoin loans are easier to process due to the low borrowing requirement, and they arrive in the borrower's account usually within 24 hours or a little over that. One can also access smaller loans with shorter terms, and their APR is relatively lower than typical bank loans.

Keep in mind that the amount of funds one can borrow depends on the collateral they can pledge since Bitcoin loans are overcollateralized. This is because crypto loans require borrowers to pledge more collateral than they are borrowing to provide security for volatile assets. The amount of collateral is determined by the loan-to-value ratio.

Loan To Value Ratio In Bitcoin Loan

Loan to Value (LTV) Ratio is a term that represents the fraction of a loan to the value of the collateral backing it. It refers to the measurement of a loan balance in relation to its collateral asset.

Traditional loan providers typically assess a borrower's creditworthiness using their credit score. This score is based on credit history checks carried out by third-party credit agencies. A higher credit score means a lower risk for the credit provider.

Similarly, crypto lenders use LTV to assess each borrower's lending risk. In this case, the lower the LTV, the lower the risk.

Most crypto lenders provide loans with a maximum LTV of 50% for 12-month terms, although others like YouHodler claim to offer up to 90% LTV on popular cryptocurrencies like Bitcoin.

An LTV of 50% means that one has to deposit crypto assets worth $20,000 to borrow $10,000, while a 20% LTV would require one to lock up $50,000 for a $10,000 loan.

Note that a lower LTV results in a lower interest rate, while a higher LTV would require borrowers to pay more in interest due to the lending risk.

Another essential aspect to note about LTV is the market volatility effect. Due to the unstable nature of cryptocurrencies, the value of a borrower's collateral can fall, causing the LTV to go up. One would need to raise the collateral to rebalance the loan-to-value ratio or risk liquidation.

To be on the safe side, one has to monitor their LTV, especially in times of extreme price movements, and adjust timely before the LTV exceeds the platform's liquidation LTV or threshold.

Why Take Out A Crypto Loan?

People take out loans for different reasons. However, for crypto holders, there are some considerable reasons.

Crypto investors that prioritize holding on to assets for the long-term might want to take a loan if they run into an urgent need for cash. Note that crypto-assets can still appreciate in value even while locked up in a lending platform as loan collateral; hence, long-term investors might want to take this route instead of selling off their position.

Also, a crypto loan might make more sense for a borrower if he stands to pay more in capital gain taxes than he would pay in loan interest. It could be worth it if he has enough collateral to keep the LTV down to avoid liquidation.

Some expert crypto traders also borrow crypto to use in spot, margin, and futures trading. While it is not advisable to trade with borrowed funds, an experienced trader who wants to increase his positions or diversify his crypto portfolio to maximize trading returns may take this route.

Therefore, taking cryptocurrency loans depends on a person's risk appetite and if he has enough cryptocurrencies to pledge as collateral.

Advantages Of Crypto Loans

Crypto loans have certain advantages over traditional security-backed loans. Here are some of such advantages:

No Credit Score Required

Crypto loans do not require credit checks to prove one's credit worthiness. Borrowers who do not have a good credit history can still access financing when they need it through Bitcoin loans.

One simply needs to prove that he has enough crypto to cover the requested loan amount. This is done through collateral deposits in the chosen platform's wallet.

Fast Loan

Crypto loans do not take as much time as their traditional counterparts. Since there is no need for a series of checks and verifications, borrowers can get instant approval on loan applications and get the funds in their accounts often within a day.

This is a major advantage as borrowers who need instant loans to cover urgent expenses can now access them. While the length of the approval period may vary from platform to platform, it is significantly faster than traditional loan processes.

Lower Interest Rates

Borrowers can find lower rates on crypto lending platforms than they will find with traditional lenders. Platforms like Nexo offer as low as 1% on borrowing rates. However, the key to such a low APR is to keep LTV low. While this would require more collateral to secure the loan, borrowers can access the lowest borrowing rates available.

No Tax Responsibilities

Normally, a crypto asset sale triggers a taxable event. The IRS treats crypto assets as other capital assets like stocks, and bonds. This means that a capital gain on such assets has tax implications.

However, crypto loans allow holders to unlock a fraction of their digital assets without incurring a tax responsibility. This is because there was no actual sale; the assets were sent to a lending platform as collateral.

Crypto Loan Risks

Crypto loans have certain downsides that borrowers must note before initiating a crypto loan. They are as follows:

Market Volatility

Volatility is part and parcel of the crypto market. The prices of assets can move dramatically, causing gains or losses to holders. This also affects collateral backing crypto loans.

As earlier stated, volatility can cause a borrower's LTV to go up, and if the loan is not paid back or balanced on time, the borrower's assets can be liquidated to cover the loan. Most platforms have a threshold of 85% LTV, above which the position will be liquidated at a possibly unfavorable market price.

No Guaranteed Compensation If The Platform's Security Is Compromised

Crypto lending platforms do not have FDIC insurance like traditional banks. This means that one can permanently lose the collateral locked in a platform if there are security breaches or platform collapse.

However, borrowers can greatly reduce this risk by thoroughly researching a platform before interacting with it. Some platforms have security measures in place, and insure deposits up to $100 million.

No Access To One’s Assets

Crypto borrowers select a loan term during which their assets will be locked in the lending platform. However, this can pose a challenge, especially in times of extreme price movements.

Borrowers will be unable to cash out if prices surge before the market corrects. They will also be unable to exit a position if prices fall significantly.

However, some lenders may allow borrowers to repay their loans earlier if they need to exit their position. But they will still pay the interest for the full loan term.

Not Available In All States

Certain regions have enacted laws prohibiting crypto trading and lending. This means that a borrower's location will determine if he can use a lending platform.

Also, some platforms are not available to people in some states. Therefore, borrowers must check if their chosen platform is available in their location before signing up.

How To Get A Bitcoin Loan

Getting an instant BTC loan involves a few straightforward steps, which include:

  1. Firstly, a borrower has to determine how much he can borrow with his cryptocurrency, how much collateral he can pledge, and the maximum LTV demand using the loan calculator on his chosen platform.

  2. The borrower may want to check out other platforms to see if there are more favorable rates, fees, LTV, maximum and minimum amount, and collateral protection available.

  3. He should then proceed to open an account on the chosen platform and go through the KYC checks and verification processes if required.

  4. Next thing is to request a loan. He will be required to enter the loan amount, collateral, and LTV.

  5. He would then deposit his collateral according to the platform's specified process.

  6. Finally, the borrower will receive the loan in the requested currency.

At the end of the loan term, the borrower is to return to the platform and pay the interest first, then the main loan amount. Keep in mind that borrowers who decide to repay their loan earlier will still pay the full interest for the specified loan term.

Where Can I Borrow Bitcoin Online?

There are a plethora of crypto lending platforms online, each operating differently. However, the best ones include Nexo and YouHodler. We will do a mini-review so that users can know what to expect from these platforms.


YouHodler is a fintech company that offers different high-quality services related to digital assets. It is one of the top platforms facilitating instant Bitcoin loans.

The company offers competitive rates and the highest loan-to-value ratio available in the market.

Pricing and Fees

YouHodler rules the crypto loan space, offering loan-to-value ratios of up to 90% on a variety of crypto coins, particularly BTC loans. However, their interest rates are as high as 13.5%. It also has a minimum loan amount of $100.

Getting Started on YouHodler

As part of the setup procedure, users need to provide scanned copies of their ID for verification. They will then be able to make a deposit and apply for a loan using their crypto collateral.

YouHodler loan approval takes only a few seconds. When it is finished, the requested loan amount is added to the borrower's wallet.

Borrowers get to cash out loans in two ways: bank transfer and credit card withdrawal. Borrowers can also use YouHodler's exchange feature to convert borrowed cryptocurrency to their desired currency or coin.

Why Borrow With YouHodler?

YouHodler has short-term loan offers of about 30 days. Borrowers can also extend to 60 and 180 days. Also, their support team is excellent and available to address any platform-related concerns.

Furthermore, in addition to repaying the loan, users are given three additional exit options: Borrowers may choose to close their position without repaying the loan, manage loan duration, or exit with 85% of their asset value on 90% LTV loans. They also offer other crypto services that users might find useful.


Long-term loans typically have high-interest rates, owing to YouHodler's higher LTV. Also, customers from the United States cannot use the platform's services.


Nexo is a multi-function platform that offers collateralized loans as well as crypto investment services. They provide one of the safest ways to lend and borrow over 38 cryptocurrencies, with the digital asset security expert, BitGo, insuring every account.

Pricing and Fees

Nexo's cryptocurrency lending ranges from $50 to $2 million. On the other hand, the loan to value ratio ranges from 20% to 50% of the deposited assets. One can possibly borrow with rates as low as 0.001% on this platform.

Getting Started on Nexo

One will need a Nexo Bitcoin wallet to initiate a loan application. Opening one is pretty straightforward. Begin by signing up and supplying the required information. Then, fund the wallet with cryptocurrency, in this case, BTC.

Borrowers will be required to go through a verification process through the "My Profile" section, after which they can apply for a loan and wait for its automatic approval. Loans are withdrawable at any point, and the process generally does not take long.

Why Borrow With Nexo?

Nexo users enjoy a high level of security and professionalism as insurance covers users' funds up to $775 million. The platform also provides access to multiple cryptocurrencies, including stablecoins.

Nexo does not have a limit on crypto deposits, and borrowers can also repay part or all of their loans at any point.


Their support team frequently responds to user inquiries with automated messages. If a user is unsure about what he is looking for, this can cause confusion.


CoinLoan is another platform that helps users manage their crypto assets. It also offers a high level of security that few can match and allows borrowers to insure their losses if they fail to pay their interest on time.

The site is not only intended to assist crypto investors in managing digital assets, but it also completely secures the collateral deposited by the borrowers.

Pricing and Fees

Pricing and fees vary depending on the loan terms. Borrowers will be charged origination fees and will have access to interest rates starting at 4.5%. The LTV ranges between 20% and 70%.

Getting Started on CoinLoan

The CoinLoan lending platform application process is very similar to any other. It only takes a few minutes to set up an account and have it verified.

Once users have completed all of that, they are to create a custom loan with their own parameters. This is done by selecting the loan amount, term, limit, interest rate, repayment options, and supported crypto collateral. After entering all of the required information, the borrower would summarize his loan offer and click "Loan Agreement," which will finalize and create the loan offer.

Note that one must fund his wallet with BTC collateral to access the loan. The amount a borrower can take depends on the market value of their collateral.

Why Borrow With CoinLoan?

CoinLoan offers security for all funds locked in its protocol; hence, one can be sure to get his collateral at the end of a loan term. They also offer some of the best rates in the market. Their support team is also very responsive and will help clear up any confusion regarding the platform's operation promptly.


The main concern for this platform is that it may suffer from a lack of liquidity. This is due to the fact that they have fewer investors than other top platforms.

When Will a borrower Get His Collateral After Paying Back a Bitcoin Loan?

Most Bitcoin loans are based on smart contract agreements. This means that the process is automated. Once borrowers repay their full loan amount and the interest accrued, the collateral will be refunded instantly to their wallets.

This also applies if they pay off the loan before the end of the loan term. Thankfully, most crypto lending platforms offer flexible repayment plans. They allow monthly payments and lump payments.

What Happens If a Borrower Cannot Repay His Instant Loan At The Due Date?

Different platforms have specific approaches to overdue loans. However, most platforms will typically give an overdue duration ranging from 24 to 168 hours, depending on the loan term.

During the overdue loan repayment period, defaulting borrowers will be charged more in interest until the end of the extra time. If borrowers still fail to repay their loan, the platform will liquidate their collateral to cover the loan.

Can One Get An Instant Bitcoin Loan Without Collateral?

A typical Bitcoin loan will always require a collateral deposit. This serves to protect lenders against default.

Although certain platforms may advertise crypto loans without collateral, this is mostly a scam. It's safer to use credible loan providers who will secure their users' identity as well as the assets used as collateral.


Bitcoin lending is a relatively new financial instrument with its own set of risks. While it allows crypto investors to access hard cash when needed without selling their Bitcoin holdings, there are some caveats.

However, these caveats are not enough to prevent one from embracing the financial system's digital transformation. Overall, Bitcoin loans provide advantages that traditional lenders can only dream of, such as the fast processing time and the lowest possible interest rates.

Borrowers should consider the advantages and disadvantages of obtaining a Bitcoin-backed loan, understand what they are, and select one crypto loan platform that is appropriate for their needs and collateral


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