Crypto lending is gradually edging out traditional forms of financing. This growing industry is allowing users to access quick and convenient loans, as well as lend out idle crypto assets for a considerable amount of interest.
While the industry is relatively new, there are already several players in the game, each offering varying features, including mouth-watering interest and security for users' funds. The similar features on offer make it challenging for lenders and borrowers to decide which platform to use.
In order to help users decide, this article compares two of the top lending platforms in the market: CoinLoan and Nexo. This comparison is based on their offerings, ease of use, interest rates, fees, security, and insurance for users' funds.
What is CoinLoan?
CoinLoan is a crypto lending platform based in Estonia. Having launched in 2017, it has grown in popularity and reputation as the platform offers instant access to extensive financial services.
CoinLoan is best described as a meeting place for crypto lenders and borrowers. Crypto investors can lend their idle assets to CoinLoan through the platform's interest accounts to earn interest, and borrowers can access loans in up to 20 different cryptocurrencies based on crypto collateralization.
It also has a crypto exchange that facilitates buying, selling, and swapping of cryptocurrencies. Users can also exchange fiat currency for crypto; however, this only applies to the Euro (EUR), Ruble, and British Pounds (GBP).
CoinLoan Products and Features
The three key CoinLoan features are Borrow, Earn, and Trade. As already established, CoinLoan allows users to access instant financing, earn passive income on idle assets, and trade crypto assets.
Similar to other crypto lending platforms, CoinLoan does not run credit checks to offer loans. They simply require the borrower to deposit a certain amount of crypto to secure the loan. Such a collateral deposit is based on a loan-to-value (LTV) ratio.
Also, investors can earn up to 12.3% APY on assets deposited in their CoinLoan interest accounts. This also depends on how much of the platform's native token, CLT, is staked. CLT staking rewards can add up to 2% to a person's overall APY.
Finally, users can swap and trade supported assets on the platform. The platform supports 23 different cryptocurrencies, including Bitcoin and stablecoins.
CoinLoan Crypto Lending
Here is how crypto lending works on CoinLoan.
CoinLoan requires investors to deposit crypto assets into their platform, which they use to facilitate loans. The platform incentivizes crypto investors to deposit their assets with them.
The interest rates vary depending on the asset deposited. CoinLoan supports several crypto assets as well as fiat currencies. While investors can earn about 5.2% on BTC deposits, they can receive up to 10.3% on deposited stablecoins while staking CLT.
Users can lend their tokens for a specified period, after which the assets and interest accrued will be deposited into their wallets. This is a reasonable way for long-term crypto investors to earn passive income using their crypto holdings.
In order to raise revenue used in incentivizing lenders, CoinLoan offers secured loans to borrowers in need of financing. This service is helpful for crypto holders who do not want to sell off their crypto assets but need to access funds for an urgent expense or to expand their crypto portfolio.
Borrowers must provide crypto collateral that will be locked up in the platform through the loan term. As soon as the loan and interest are repaid, the collateral is released to the borrower.
CoinLoan provides three types of loans: crypto-to-fiat, crypto-to-crypto, and fiat-to-crypto. The minimum loan amount is $100, and their loan terms range from 7 days to three years. Long-term loans allow for monthly repayment.
Keep in mind that these loans are overcollateralized. Users cannot borrow more than 70% of their collateral on CoinLoan. This serves as protection, especially for volatile assets.
However, failure to pay back a crypto loan will result in part of the collateral getting liquidated. The platform does this to pay back the loan when borrowers default. Positions can also get liquidated if the collateral value falls and the borrower is unable to balance it out in time.
The CoinLoan Token (CLT) is an ERC-20 token created by CoinLoan to be used within the platform. Platform users can pay platform fees with it and can also use it to repay loans.
The token is essentially used to assess customer loyalty; hence, users are rewarded for holding the token. Those who repay loans with CLT can get a significant discount on the loan amount.
The token can also be used as collateral for a crypto loan. If a user borrows against CLT, they pay no platform fees and can access a much higher LTV ratio as a result. (A higher LTV means the borrower will be required to deposit less collateral than when the LTV is lower)
One can also stake CLT with CoinLoan to boost overall interest rates. However, this depends on the amount of CLT staked. The higher the stake, the bigger the interest.
Security & Insurance
CoinLoan keeps cryptocurrency assets in multi-signature cold wallets and uses two-factor authentication for sensitive activities like changing passwords and withdrawing funds.
According to CoinLoan, it also works with a market-leading cloud services provider that has been certified by the world's most strict security standards; however, the name of the cloud services provider is not mentioned.
Furthermore, the website mentions that BitGo provides up to $100 million in coverage for digital assets on the platform. The provision is for insurance that protects users' assets and collaterals.
Finally, CoinLoan holds three Estonian financial licenses, which is why they can operate crypto, fiat, and alternative payment methods globally.
CoinLoan Pros & Cons
This section summarizes CoinLoan's selling points and downsides.
- CoinLoan has a neat interface that allows for easy setup and navigation.
- The platform supports up to 20 crypto assets.
- It also supports fiat currency lending and borrowing.
- The platform is regulated in Estonia and has a European Financial License.
- Crypto assets are covered by a $100 million insurance.
- Some important information about the platform's operation is not available on the website.
- Users need to stake CLT to earn high-interest rates.
Still curious? More about CoinLoan.
What is Nexo?
Nexo is a top platform that facilitates instant crypto loans. It is a blockchain company launched in 2018, offering over 40 currencies, and operates in up to 200 jurisdictions.
The platform prides itself on its smooth user experience and high-class security for users' funds. It also offers exchange services with an interesting twist.
Nexo is currently partnering with popular blockchain companies like Terra, Fireblock, Brave, and BitGo, and also has the membership of some reputable blockchain associations such as the Bitcoin Foundation and Swiss Fintech.
Nexo Products and Features
Nexo basically offers crypto loans and exchange services. While it does not have a lending structure for crypto holders in the same way as CoinLoan, one can also deposit funds in the platform's interest account to earn a passive income.
They offer interest rates that compare well with other competitors in the market. However, just like CoinLoan, Nexo requires users to hold their native token, NEXO, for additional benefits. They have varying reward levels to encourage loyalty among users.
Nexo Crypto Backed Loans
Crypto loans on Nexo work similarly to loans on other platforms. One needs to deposit assets in a savings account on the platform and then use the deposit as collateral to borrow funds.
Nexo allows for instant approval for loan requests, and borrowers can receive their requested funds within 24 hours. Borrowers can request loans in over 40 different currencies and may also choose stablecoins like USDT or USDC.
Their repayment structure is flexible, and borrowers do not need to pay fees to borrow cash or stablecoins. Interestingly, one can get loans at as low as 0% APR, depending on their loyalty level. However, this rate can also be as high as 13.9%.
Nexo allows its users to swap cryptocurrencies within the platform. The Nexo exchange, which is best described as an ‘anything-to-anything’ exchange, facilitates swaps between over 75 digital assets and fiat pairs, with over 200 market pairs that may not be available on other exchanges.
Also, loyal users can receive as much as 0.5% cashback every time they swap tokens on the Nexo exchange, depending on their loyalty tier. This is determined by the percentage of the users' portfolios held in NEXO.
Nexo also offers high-interest savings accounts where users can deposit crypto assets as well as fiat currencies like EUR, USD, and GBP to earn interest.
Users can earn up to 36% on idle crypto assets deposited with Nexo, and they do not have to wait for the end of the month to withdraw their principal amount and the interest accrued. With their flexible savings, Nexo pays out interest daily; hence, investors can deposit or withdraw funds from their savings wallet at any time.
Also, Nexo savings accounts do not have a minimum requirement. Users can deposit any amount of money and start earning interest immediately.
However, it is worth noting that withdrawals can attract fees on Nexo. The platform offers one free withdrawal monthly and up to five free withdrawals for NEXO token holders.
NEXO was developed for use within the Nexo platform. Users can qualify for various benefits on the Nexo platform by holding the token.
Depending on the amount of NEXO a user holds, they can earn significantly higher interest on their savings, pay lower interest on loans, qualify for up to 0.5% cashback on token swaps, and get up to five free withdrawals monthly.
Plus, Nexo offers dividends to token holders. Their four loyalty tiers require users to hold 0%, 1%, 5%, or 10% of their portfolio in NEXO to qualify for these benefits.
Nexo offers a natural extension for their credit lines by allowing users to spend crypto on everyday purchases using their Nexo Card. The card works like a regular debit card and is accepted by over 40 million merchants worldwide.
With a Nexo Card, one does not need to sell off crypto assets to make purchases. Nexo simply supplies the fiat currency users need to make purchases each time they use their card, and in return, the user pays with crypto. It has no monthly minimum repayments.
The Nexo Card offers various advantages, including instant crypto rewards on every transaction. Card holders can receive up to 0.5% cash back if they choose to get their rewards in Bitcoin and up to 2% if they choose NEXO.
Still curious? See the comprehensive Nexo Card review.
Security & Insurance
Nexo acts as the custodian for all deposits on its platform. It uses the cryptocurrency custodial solution, BitGo to store users' digital assets.
Nexo stores its entire assets in cold wallets and holds the private keys offline. Also, the company partners with Ledger Vault and BitGo to provide up to $775 million in insurance protection for deposits on their platform. However, there are no specific indications as to what percentage is insured and kept in cold storage.
Also, platform users are to enable Two-Factor Authentication through SMS, email, or the authenticator app. They must confirm account ownership whenever they log in, withdraw funds, or wish to change account settings.
Nexo Pros & Cons
This section summarizes Nexo's selling points and downsides.
- Users can access high-interest rates on deposits in savings accounts.
- Users can get up to five free withdrawals monthly.
- The platform supports loans in crypto and fiat.
- Users can earn cash back when they swap tokens or use the platform's debit card.
- Deposits are covered by up to $775 million in insurance.
- Similar to CoinLoan, higher interest rates depend on how much of one's portfolio is held in the platform's native token.
- The platform's rates occasionally change; hence, it is hard to forecast interest rates.
Need more info? In-depth Nexo review.
CoinLoan vs Nexo: Regulation
Both Nexo and CoinLoan are regulated. Nexo has legal agencies all around the world so as to efficiently service their over 200 jurisdictions while adhering to every relevant local and global requirement.
The Nexo group confirms that the company follows all relevant laws and maintains top-tier legal counsel in all regions where they operate. The appropriate legal and compliance teams review every aspect of the company's moves before they are implemented.
On the other hand, CoinLoan chooses to be regulated by the Estonian Laws. This is because the North European country is more open to crypto initiatives than many others.
The company is licensed under Estonia Financial Authority and operates worldwide. They handle complicated KYC and anti-money laundering (AML) procedures to ensure that everything follows European and international rules.
CoinLoan vs Nexo: Security
Both CoinLoan and Nexo have necessary security measures in place. While CoinLoan insures users' deposits up to $100 million, Nexo has a $775 million insurance coverage.
Also, both platforms store assets in cold storage with the private keys held offline. Users must also go through a two-factor authentication process to withdraw funds or change account settings. Nexo users can also use fingerprint or face recognition to access their accounts when using the app.
Nexo has a whitelisting feature that allows for withdrawals to a few selected addresses. If a hacker gains access to a user’s account, he will be unable to move funds into any other account outside the whitelisted addresses.
CoinLoan vs Nexo: Exchanges
Both CoinLoan and Nexo operate crypto exchanges that facilitate buying, selling, and swapping of digital assets. Both platforms accept crypto and fiat currencies; however, Nexo supports more assets than CoinLoan.
Nexo exchange also offers a certain percentage of cashback to reward loyal users after every swap. This feature is not available on CoinLoan.
CoinLoan vs Nexo: Fees
CoinLoan does not charge a fee for fiat and cryptocurrency deposits. Withdrawals in both fiat and cryptocurrency are also free. Interest rates start at 4.5% and vary depending on certain borrowing factors.
Nexo, on the other hand, does not charge a fee for account maintenance. Furthermore, users can withdraw their cryptocurrency once per month, or up to five times if they are staking NEXO, without paying fees. Subsequent withdrawals, however, will incur a fee.
Nexo can charge as low as 0% APR on the amount borrowed and as high as 13.9%. This depends on the amount of cryptocurrency a user deposited as collateral, the coin or token used to back the loan, and their loyalty tier.
Compare with CoinLoan and Nexo alternatives
Similar Savings Accounts and Loans
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|CoinLoan||Up to 5.2% on BTC|
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Choosing between two of the best crypto lending platforms always comes down to the users' needs. This is because the platforms are often similar in their offerings, with few areas where they seem to have more attractive offerings.
In the case of CoinLoan and Nexo, both platforms provide investment opportunities in a variety of crypto assets. They also offer instant loans that can be backed by crypto or fiat. They are both regulated and have appropriate security measures and insurance in place, with their platform interface being simple and easy to navigate.
Both platforms also have native tokens that play significant roles in their platforms. Furthermore, holding or investing in these native tokens puts the investor in a position to receive high-interest rates and other rewards.
However, Nexo's tiers bring in more benefits for its users; Nexo's interest rates for their crypto interest accounts might be a better option for someone who simply wants to accrue interest on their crypto holdings. Users could also enjoy cashback by engaging with the platform's other products and services.
But for those looking to take out a loan, CoinLoan might be a better option. The platform offers significant discounts on loans if they are repaid in their native CLT token.