The Safest Crypto Loan Platforms
A list of secure, reliable, and trustworthy crypto loan platforms.
If you’re a crypto investor, you know that crypto loan platforms are the best places to get loans today. However, there are many crypto platforms in the market, which makes choosing the most reliable one tricky. To help you narrow down your options, we have compiled a list of secure, reliable, and trustworthy crypto loan platforms. We’ve also included useful tips to help you pick an excellent platform more effectively. Read on.
What Are Crypto Loan Platforms and How Do They Work?
These are platforms that loan out crypto assets to borrowers for an agreed period at a certain interest rate. To take a loan, you must provide digital assets as collateral. You will then need to repay the loan within the agreed period to retrieve the collateralized assets.
Crypto loan platforms usually act as intermediaries between lenders looking for a way to earn passive income and borrowers searching for loans. They also manage transactions and hold the collateralized assets to help keep borrowers accountable for the agreed terms.
Which Are the Best Crypto Loan Platforms?
Now that you know what crypto loan platforms are, let’s discuss the best options in the crypto world today.
Nexo is a fantastic option for getting quick cash as it offers instant loans and allows 33 cryptocurrencies as collateral. You can apply for small loans of even $50 and huge ones of up to $2 million. You can repay the loan in crypto assets, fiat currency, or a combination of both. The interest rates start from 0.001% APR.
If you are looking for a loan platform without a fixed payment plan, then Nexo is a great fit. Nexo allows you to repay your loan partially or fully, depending on what’s more convenient. It also has about $375 million in insurance. So, the chances of losing your collateralized assets if anything happened to Nexo are pretty slim. Plus, it processes loans within 24 hours without involving any paperwork.
Nexo has a loan calculator that shows how much you can borrow and the needed crypto collateral. The platform also provides a tool for checking your current loan-to-value ratio. This helps determine when you’re almost getting a margin call, so you can start getting prepared.
CoinLoan is another excellent option that offers instant crypto-backed loans, provided you have enough collateral. One thing that makes CoinLoan popular among crypto investors is how it allows stablecoins as collateral. This option allows you to take loans without worrying about the amount fluctuating due to market volatility. This also saves you from paying more collateral when your crypto assets are in a bear market.
The platform has a 70% loan to value ratio, which is pretty high since most loan platforms offer 50%. Its interest rates start at 4.5%, and the minimum loan amount is $100. You can choose a loan term between a week and three years.
CoinLoan does not charge any fines or hidden fees. This makes it easier and cheaper to borrow funds and repay them. It also has biometric authentication and uses an insured custodian to hold crypto assets. Therefore, it would be difficult for an unauthorized person to access your crypto holdings.
You can use CoinLoan’s calculator to check the loan amounts you can get depending on the available collateral.
YouHodler offers many collateral options, and the loan-to-value ratio ranges from 50-90%. Like CoinLoan, YouHodler also has a calculator that shows what interest rate to expect for a particular loan amount.
The platform has flexible loan terms. So, it can allow you anything between a month to a year to repay the loan. You can withdraw the loan in fiat currency, stablecoins, or other cryptocurrencies such as Bitcoin. And the loans are processed almost instantly.
YouHodler lets you borrow even $100. Therefore, if you just need some quick cash for personal expenses, YouHodler could be the go-to platform. YouHodler also has $150M pooled crime insurance and secure hot and cold storage wallets to minimize the risk of clients losing their crypto holdings.
Binance is among the best crypto exchanges on the planet, with over 28.5 million users. It offers almost every service you would need in the crypto market, including loans. You can borrow loans on the platform, provided you are a registered user. Binance allows you to borrow different crypto assets, including stablecoins such as USDT. Plus, you can use different cryptocurrencies like Bitcoin and Ethereum as collateral for your loan.
Like most crypto platforms, Binance has a loan calculator where you can enter the desired loan amount to see the required collateral. Binance also lets you choose the most reasonable loan duration, which can range from a week to 6 months. However, you can still repay the loan earlier than stated, and the platform will automatically update your interest rate.
BlockFi cryptocurrency loans are among the most affordable in the market, as the interest rates start from 4.5%. This borrowing platform allows you to repay the loan before the due date without facing any penalty fees.
You don’t need to provide many unnecessary details when creating an account and applying for a loan. This makes the entire borrowing process pretty seamless. BlockFi releases loans within the same day of application.
This crypto loan platform also allows you to use cryptocurrencies such as Ether (ETH), Bitcoin (BTC), Litecoin (LTC and Pax Gold (PAXG) as collateral. However, the minimum you can borrow is $10,000. Therefore, BlockFi is mostly suitable for borrowing loans for huge projects.
BlockFi enables you to easily check the applicable collateral for the loan amount you want using its online calculator. You can receive the loan in USD or a crypto asset like USDC. The loan can be sent to your bank account or crypto wallet. Additionally, BlockFi has top-notch security systems that you can count on to protect your crypto assets.
How to Choose the Best Crypto Loan Platform
As you can see, there are many crypto loan platforms today. And although they might offer the same cryptocurrencies for borrowing, their loan conditions vary. Therefore, you must learn how to pick the right platform for you. The following factors will help you do so easily:
The interest rate is mostly determined by the loan amount and repayment period. However, other factors, such as missed interest payments, may also increase or reduce your rate depending on the platform. Therefore, always inquire about the exact rate that’ll apply. Also, look for a platform with favorable interest rates to help make the loan easier to repay.
A reliable crypto loan platform should have superb security systems to keep hackers away. It must also be insured. This ensures you would be compensated if something happened to the platform and crypto-assets got stolen.
Since most loans are issued in volatile cryptocurrencies, you must provide about double the loan amount as collateral. However, this amount varies among platforms. Therefore, consider checking out different loan platforms to see which one is cheaper.
Crypto platforms also have specific collateral assets they accept. So, always verify if a loan platform accepts the crypto asset you want to use as collateral. That way, you don’t have to convert your hodled digital assets into other cryptos to get a loan.
The loan duration can be fixed or flexible, depending on your crypto platform. Therefore, if you want a loan that will give you enough time to repay, look for a platform that lets you choose a suitable loan term.
Minimum Loan Amount
Some crypto loan platforms allow you to borrow even a $50 loan. For instance, the minimum loan amount for YouHodler is $100, while that for BlockFi is $10,000. So, trying to borrow $100 on BlockFi would lead you to a dead end.
Are Crypto Loans Safe?
These loans are among the best things to ever happen to investors. They are offered by reputable centralized finance platforms that have high-end security systems. These platforms also insure themselves to protect your collateralized assets. Therefore, crypto loans are safe, but the loan platform you choose highly determines how secure your investment is.
Crypto-backed loans have become more accessible since many loan platforms offer them today. However, that doesn’t mean you should borrow funds from any platform you find, as it might be unreliable. That’s why we made this detailed guide to show you the most reliable loan platforms in terms of high security, friendly borrowing terms, and reasonable interest rates. So, we hope that it helped you pick the right crypto loan platform for you.