Crypto Loans & Top Crypto Lending Platforms


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Cryptocurrencies have come a long way since 2008 when they were envisioned by the mysterious creator, Satoshi Nakamoto, in the paper for Bitcoin. Their inception gave financial freedom to people all across the globe. Cryptocurrencies have gained a much broader adoption in the past 5 years, with different altcoins, projects, technologies, etc., coming into the market and changing the financial system. Crypto loans are among such financial innovations where users can access loans against their crypto assets or earn profits on their digital assets in the crypto world. Crypto holders can earn interest on their crypto assets by borrowing or lending them out on crypto lending platforms.

Read on to learn everything you need to know about cryptocurrency-backed loans, the advantages and risks associated with them, and crypto lending platforms.

Crypto Assets

Crypto assets are digital assets that use public ledgers over the internet to prove ownership. They use cryptography, peer-to-peer networks, and distributed ledger technology (DLT) – such as blockchain – to create, verify and secure transactions. Blockchain transactions have additional security as they are irreversible. Crypto assets may be used as a medium of exchange, a way to store value, etc. Crypto assets operate independently of any central or financial authority.


Cryptocurrency is the most popular type of crypto asset. It’s a digital currency or medium of exchange. “Crypto” alludes to the numerous cryptographic techniques and encryption algorithms that secure these entries, such as public-private key pairs, hashing functions, and elliptical curve encryption. Cryptographic techniques enable secure online financial transactions without the need for third-party interference.

Cryptocurrencies were created as an alternative to fiat money, and their value is based mainly on supply and demand in the market. Cryptocurrencies can be mined or purchased from crypto exchanges, though not all eCommerce sites allow crypto purchases. The surging value of cryptocurrency in the financial market has made it a popular trading instrument. An increasing number of crypto holders hand their digital assets to crypto lending platforms for interested traders to borrow.

Thousands of unique cryptocurrencies are available in the crypto world today. Here are some of the popular cryptocurrencies in the crypto market:

  • Bitcoin: Invented in 2008 by Satoshi Nakamoto, an alias used by a person or group, bitcoin is the first cryptocurrency. Trading as BTC on exchanges, bitcoin is the most valuable and popular cryptocurrency by far.
  • Ethereum: Although it ranks second to bitcoin by market capitalization, Ethereum is the most vigorously used blockchain. Ethereum is a decentralized blockchain-based software platform that utilizes ether (ETH) as its primary cryptocurrency.
  • XRP: Ripple, a digital blockchain-based payment network and settlement system uses XRP as its native currency. XRP was created to diminish wait times and transfer fees of financial institutions.
  • Cardano: Cardano, trading as ADA, is the cryptocurrency that operates on the Cardano blockchain. The token holders can vote on funding decisions, updates, and improvements.
  • Stellar: Invented by the Stellar Development Foundation, the Stellar blockchain links financial institutions to facilitate economic and low-cost transactions in evolving markets. Lumen, Steller’s native token, trades as XLM.
CryptocurrenctMarket Valuation
Bitcoin/BTC$815 billion
Ethere/ETH$344 billion
Cardano/ADA$45 billion
Ripple/XRP$36 billion
Dogecoin/DOGE$31 billion
Polkadot/DOT$19 billion
Bitcoin Cash/BCH$19 billion
Bitcoin Cash/BCH$10.4 billion
Solana/SOL$10.1 billion

Crypto Loans

Crypto-backed loans are secured loans. Another kind of crypto loan, known as a Flash Loan, is not secured by any asset and is operated on smart contracts. However, we refer to crypto secured loan when we speak of a crypto loan. A crypto loan is similar to a secured conventional loan, but the underlying security or collateral needed to secure the loan is a cryptocurrency asset, not a physical one. A crypto loan gives you access to money immediately if you have no intention of trading or using your cryptocurrency in the foreseeable future. Cryptocurrency, in this case, is the asset tendered to a lender as a swap for cash. The cash obtained is then paid back in installments, with the lender having the right to cash out or liquidate the cryptocurrency if you fail to pay back the loan on the agreed date.

Some rights, such as the ability to trade or use your crypto asset to make transactions, will be lost while you retain ownership of the assets you’ve used as collateral. Also, if the value of your digital assets drops significantly, you may end up owing back much more than you borrowed should you default on the loan. You can obtain crypto loans through a crypto lending platform or a crypto exchange. 

Crypto loans have several features that make them appealing for crypto lenders and borrowers alike. Crypto loans provide several benefits to lenders who own substantial amounts of crypto assets and want to liquidate them without selling and paying taxes. Borrowers may also consider crypto-secured loans because of the reduced interest rates and the absence of credit checks on crypto-backed loans.  In addition to the benefits crypto loans provide, people also consider them because they have no intention to trade their crypto assets in the near future. The acronym HODL, which stands for hold on for dear life”, is a common refrain in the crypto-focused online forum.

This information is intended for informational and educational purposes alone and should not constitute investment advice or any other kind of advice. The crypto market is volatile, and borrowers should do their own research before borrowing crypto assets.

BlockFi loans
BlockFi loans

Problems With Crypto Loans

While cryptocurrency loans might seem very lucrative, there are some inherent disadvantages associated with them. Among such disadvantages are margin calls when the value of your collateral drops below a certain threshold and the lender requires you to increase your holdings to maintain the loan. For example, between April 2021 and October 2021, the bitcoin price seesawed between $30,000 and $64,000. In crypto-speak, Loan-to-Value or LTV is the ratio of the amount loaned to the value of the collateral pledged. For example, the maximum LTV of BlockFi, a crypto lender, is 70%.

Another problem is that if you’re lending your own digital assets, the funds in a crypto interest account aren’t insured like the money in your bank account. So compensation isn’t guaranteed if, for example, during a security breach, you lose your funds.

Advantages of Crypto Loans

Anyone looking into lending or borrowing crypto assets will question whether cryptocurrency loans are a great idea. There are several options accessible to users who can choose between borrowing or lending crypto loans. Here are some of the numerous advantages of crypto loans:

  • Low-Interest Rates

The meager interest rate is a lucrative prospect that attracts potential borrowers. For example, BlockFi, a major lending platform, offers borrowers a 4.5 percent annual percentage rate (APR) on long-term loans. Many other platforms also have very low-interest rates on cryptocurrency loans secured for the long term. 

  • Earn Interest

Lenders have vast opportunities to earn high-interest rates on their loans. They can make a steady passive income by loaning out their crypto assets, stablecoins such as USDT, or cash.

  • Ownership of Crypto Assets

Crypto holders who own many crypto assets and need cash don’t need to sell their crypto assets. Instead, they can secure cash loans by using their crypto assets as collateral and getting them back after paying the loan. 

  • Crypto assets ownership

Crypto holders that own many crypto assets and require cash need not sell their crypto assets. Instead, they can obtain cash loans by using their crypto assets as collateral and getting them back after paying the loan. 

  • Fast and secure

The main issue with conventional loans is that they are very time-consuming, and not everyone can be assured of securing a loan. With cryptocurrency loans, the time needed to secure a loan is minimal, and almost everyone can obtain one.

Disadvantages of Crypto Loans

Although cryptocurrency loans seem profitable, they have several inherent disadvantages. A few of these disadvantages are:

  • Unstable Crypto Prices

The crypto assets against which a loan is secured can go through massive volatility in their prices throughout a loan period. If the price of the crypto assets drops below the threshold level set by the lender, there is a risk of a Margin Call. When a margin call occurs, the borrower might need to deposit more of that asset to fulfill the loan requirements. Failing to do so might result in the platform selling the borrower’s assets to recuperate its losses.

  • Locked Crypto Assets

Once a loan is secured against crypto assets, they are locked in for the entire loan duration, and the borrower can no longer access them for trading or other purposes. If the price of the assets goes to the moon, the borrower won’t be able to sell them or, likewise, if the price drops substantially, they won’t be able to sell them to cut short their losses.

  • Limited Repayment Period

Most cryptocurrency loans have a short repayment period ranging from 12 months to 3 years. Compared to conventional loans, this period is shorter and puts much more pressure on the borrower.

  • High Minimum Loan Amount

When it comes to cryptocurrency loans, the loan amount is usually high, making it much riskier for people to get one. Moreover, to secure a cryptocurrency loan worth $10000, platforms such as BlockFi, require a crypto-asset holding worth a minimum of $20000 to get approval for the loan.

How to Secure a Cryptocurrency Loan

Getting a cryptocurrency loan is relatively easy compared to traditional loans. To secure a crypto loan, you first need to choose the right platform. With a trustworthy and reliable lender, you can rest assured that your cryptocurrency will be safely stored. However, the security and storage will be different for every lender, so you will want to ask questions about the security of your cryptocurrency with your lender.

You’ll also need to ensure the platform provides the crypto you are interested in and check the yearly returns. The amount of collateral you use will equate to the loan amount available to you. The Loan-to-Value ratio specifies the loan amount compared to the collateral value, i.e., if you pledge $10,000 worth of crypto as collateral and receive $5,000 as a loan, 50% is the LTV. Crypto loans generally have minimal LTV ratios due to their unsteady nature. 

Crypto Lending

With the development of DeFi, crypto lending has seen a prominent emergence in the crypto world. Crypto lending refers to a type of Decentralized Finance that allows investors to lend their cryptocurrencies to different borrowers to get interest payments in exchange, also called “crypto dividends.” Borrowers take up these loans from various platforms for trading and other purposes. Smart Contracts are the answer to how crypto lending works – the borrower gets funds in either fiat currency or cryptocurrency, and immediately a pledge is made in a smart contract. When it comes to crypto lending, borrowers also have the chance to stake their cryptocurrency as guarantees of loan repayment or as security. The investors will be able to sell the crypto assets if the borrower doesn’t pay off the loan anymore to recover the losses.

Lending Your Digital Assets

We distinguish between CeFi (centralized finance) and DeFi (decentralized finance crypto lending platforms. One of the most significant differences between them is the fact that the system is regulated in the case of CeFi, and the responsibility of safeguarding the money of the users is with the exchanges, whereas precisely the opposite is the case with DeFi.

CeFi Platforms

Centralized finance or CeFi platforms typically act as mediators in executing the crypto lending process. A centralized cryptocurrency lending platform takes control of lenders’ assets and the borrower’s collateral during the loan period, restricting access to both parties. A KYC process is also required, excluding anonymity on a centralized cryptocurrency lending platform.

DeFi Platforms

Decentralized finance platforms use code-based contracts, also known as Smart Contracts to execute the lending process. DeFi lending platforms are automated and execute specific demands due to pre-programmed instructions. Undergoing a KYC is unnecessary as the process and ruleset are pretty transparent.

How to Lend Cryptocurrency

Crypto lending happens through a third party that connects the lenders and borrowers. The crypto lending process occurs in the following steps:

  • The borrower requests a crypto loan from a platform
  • The borrower stakes the crypto collateral when the platform accepts the loan request. They will only get back the stakes  after funding back the entire loan
  • Using the platform, the lenders will automatically fund the loan, which is a process that investors cannot see
  • Investors will receive regular interests as payments
  • When the borrower pays off the whole loan, they will get back the crypto collateral.

Crypto Lending Rates

The rates for lending crypto vary across different platforms. The platform you select will determine how much you get in return for your investment. Every lending platform has a specific ROI, and other risks are associated with different platforms. There is an annual yield that can be expected regarding crypto lending. It’s between 3% to 8% for crypto coins and between 10% to 18% for stablecoins. The rates differ per coin for every investment platform. You’ll have to choose a platform based on the coins you’re holding for the maximum optimization of your returns. So, your crypto lending rates will automatically depend on the platform you select.

Crypto Lending Platform

A crypto lending platform is an online platform that lets people lend and borrow cryptocurrency. While they work as a traditional lending service, they operate on peer-to-peer interactions. Two different parties utilize these platforms:

  • Borrowers

People who need physical fiat currencies (e.g., USD, EUR) will use their crypto assets as collateral to obtain loans without having to sell them.

  • Lenders

Lenders are also called investors and they play a crucial role in the lending process. They earn passive income by depositing their assets in fixed or flexible terms. 

The platform type determines the lending process’s regulations, involving liquidity pools, codes, or matching orders.

How to Choose a Crypto Lending Platform

One of the most important considerations for choosing a crypto lending platform is its security. Users should look for security features like multifactor authentication (MFA) and encryption. Support for multiple currencies — beyond the basics of bitcoin (BTC) and ether (ETH) — and various loan amounts and other financial services make a platform more usable. Below are some other factors that you should consider before selecting a platform:

  • Interest Rate

An essential factor in choosing a lending platform is the interest rate it offers. Lenders can benefit from high rates, but borrowers want lower rates to keep their interest payments down.

  • Loan Duration

Flexible loan duration is also a key feature in a loan platform.

  • Collateral Amount

The collateral you need for borrowing a specific amount is another critical factor to consider.

  • Fees

Various crypto assets incur different fees, i.e., administration and monthly withdrawal fees, on different platforms, and this is a crucial factor to consider in choosing the best lending platform for you.

  • Minimum Deposit Limit

The final aspect in selecting the best crypto lending platform would be the deposit limit.  A lack of deposit limits (which limit how much or how little lenders can deposit at once) is a key feature to look for in a loan platform.

Pros of Crypto Lending

  • More accessible than traditional methods and offers everyone financial freedom
  • Low transaction fees
  • No need for a bank account
  • Absence of geographic limitations
  • Reward incentives and high-interest rates 
  • Access to a diversified loan portfolio
  • Faster and simplified procedures.

Cons of Crypto Lending

  • Over collateralization of assets
  • Vulnerability to online attacks
  • Not insured
  • Volatile crypto market.  

Users of crypto lending platforms can borrow and lend cryptocurrencies using smart contracts or a collateral-based system. This innovative environment allows them to capitalize on their deposits, giving investors and enthusiasts new opportunities to grow their assets, gain liquidity and earn interest. Make sure to conduct proper research into the best crypto lending platforms to choose a trustworthy and safe platform for you. 

Wallets like the CoinStats Wallet are highly advisable for lenders to lend out their crypto assets securely. Additionally, you can track all your crypto assets across different platforms and more on  CoinStats

How a Crypto Lending Platform Works

Once you find a reliable platform, you can take out a crypto loan very easily compared to traditional loans. Depending on how much collateral you can use, you will get a loan amount. Crypto loans usually come with very low LTV ratios due to the volatility of the crypto markets.

To lend your cryptocurrency, you have to find a trustworthy platform and determine the coins you want to lend. Once you give a crypto loan, you will stake your crypto collateral and then wait for investors to fund the loan. The investors will receive interest, and once the loan is paid back by the borrower, the crypto collateral is returned.

Comparing Platforms

Let’s look into the features and services of some of the best crypto lending platforms:

  • Some have no deposit limits (e.g. Celsius, BlockFi)
  • Your choice of crypto-asset will determine the lending and borrowing platform you use (e.g. Binance for Bitcoin)
  • Some provide high returns on crypto, others on stablecoins
  • Some offer unlimited crypto lending periods (e.g. YouHodler, Celsius)
  • Some offer a bonus when you sign up (Celsius at $50).

Best Crypto Lending Platforms

Here are a few of the best crypto lending platforms that are gaining popularity today: 

1. Celsius Rating – 9/10

Founded in 2017 and run by CEO Alex Mashinsky, Celsius is a U.S.-based crypto lending platform and one of the most popular ones. Primarily a Decentralized finance platform, the Celsius network is a leading platform operating on the Ethereum Blockchain, boasting about 485,000 users and over $17B in assets. Celsius offers better rates for coins and U.S. dollar loans and has a 24-hour trading volume of $4,003,011.

Celsius is a crypto lending platform that doesn’t require a minimum investment deposit; however, depositing a few thousand dollars worth of crypto is highly recommended to get significant returns. There is no maximum loan to take out (your collateral determines the maximum loan), but you need to deposit a proportional number of crypto to get the loan. Starting with a smaller amount is advisable to gain experience in crypto lending on the platform.

Celsius interest rates vary depending on the cryptocurrency you’re lending. You can expect to earn a Celsius interest rate on an annual percentage yield (APY) of up to 17%, paid every week when you lend crypto on the Celsius network. You can also expect to earn interest rates between 3.5% and 6% APY on your Ethereum and 3.51% and 6.2% APY on your Bitcoin.

Celsius fits beginners with minimal experience in crypto trading and anyone interested in making passive income by making crypto deposits through its lending services. It also offers a crypto app that allows you to purchase 10 different cryptos and convert them into more than 30 different e-currencies. Users can convert their digital assets to CEL, Celsius native currency, although this is a drawback for many users investing in cryptocurrencies like Bitcoin, Ethereum, or Litecoin. Excellent rates are assured no matter which crypto you are lending on the platform. Celsius supports all major tokens, including Bitcoin, Ethereum, and stablecoins. Additionally, if you choose to earn in CEL tokens exclusive to the Celsius network, you can earn 25% more rewards. The LTV range is between 25% and 50% when you lend money to borrowers.

As an “investor,” you can utilize the Celsius network app to lend your crypto to borrowers. Downloading and verification take about 10 minutes, making it an excellent alternative to Nexo. Note that lenders and borrowers will need a copy of their ID cards and some personal information for complete access to all the features on the app. You can top-up your account from any Wallet or buy cryptocurrency through the app. 

Another advantage is that Celsius doesn’t charge any fees – transfer fees, withdrawal fees, transaction fees, early termination fees, or origination fees –  for its services. Using the Celsius wallet is completely free. The Celsius website has a calculator allowing you to view how much you can earn based on your selected duration and crypto. There’s also no need to sell your crypto if you need emergency funding, as you can stake it as collateral and obtain funds with interest rates as low as 1% annual percentage rate (APR).

Celsius provides financial services not accessible through conventional financial institutions. For example, The Celsius financial report is the only publicly available report amongst all bitcoin lending platforms.


  • Free withdrawal
  • Extensive DeFi services
  • Co-founded by a seasoned entrepreneur
  • Straightforward app
  • Up to 17% APR on stablecoins
  • Up to 6.35% on crypto
  • No fees for loan origination, transfers, or minimum balance
  • Available in over 150 countries for trade via iOS, Android apps, or desktop
  • CelPay transfer system.


  • Not regulated
  • Highly centralized control
  • Limited trading via third-party vendors- does not have a crypto exchange
  • No support
  • Questionable business practices
  • U.S. residents have no access to the CEL token.

Loan Terms

  • 6, 12, 18, 24, 30, or 36 months
  • Borrowers can cancel the loan any time after six months of maturity without any fees
  • Minimum term interest rate payment of six months.

Supported Cryptos

  • Bitcoin (BTC)
  • Binance USD (BUSD)
  • Ethereum (ETH)
  • Bitcoin Cash (BCH)
  • Stellar Lumens (XLM)
  • Dai Coin (DAI)
  • USD (USDT)
  • Tether (USDT)

Security is essential to the Celsius team. Six security certifications include 365/24/7 network monitoring, ISO/IEC, cyber intelligence, incident response experts, and cryptographic innovations. Multi-party computation, a unique technology, provides top-tier security.

Although Celsius is seemingly the fastest growing crypto lending platform, note that there is no dedicated support, potentially harming your experience with the platform.

To sum up, Celsius is one of the top crypto lending platforms for serious crypto investors to consider.

2. Nexo – Rating 8/10

Nexo is a respected name in decentralized finance and one of the best cryptocurrency lending platforms today. Founded in 2018, Nexo allows you to deposit fiat currencies or cryptocurrencies to earn interest through crypto lending and borrowing on the platform. 

One of the top bitcoin lending platforms, Nexo, was founded by the team behind Credissimo- a large European lender. Although it claims to be regulated, neither Nexo nor Credissimo own lending licenses in Estonia, one of the prominent locations where Nexo is Registered, according to the Estonian financial institution.

 With Nexo, you can earn passive income from your idle assets without risk. Simply top up your wallet and earn up to a 17% Nexo annual percentage rate.

Nexo is accessible across mobile platforms (iOS and Android) and the web. 

Nexo supports major tokens with more support underway; however, it does not support wrapped coins. In addition to over 40+ fiat currencies, the Nexo lending platform supports over 175 market trading pairs such as:

  • ETH/ DAI
  • ADA/ ETH
  • LTC/ ETH
  • XLM/ BTC
  • DAI/ BTC

Interest Rates

  • Cryptocurrency: 4-5%
  • Fiat currency: 4-6%
  • Nexo: 7%
  • Stable coins: 8-10% (+2% on all, when paid in Nexo).

Terms for earning interest rates on fixed loans are between 1 and 3 months. In comparison, flexible loans have no lock-in. Interest rates on borrowing range between 13.9% and 6.9% depending on the loyalty tier.

You need a Nexo account to be eligible for loans, and then you must deposit funds into your Nexo account. Basic and Advanced verifications are required to obtain loans in fiat currency. Multiple loans are possible depending on the credit line amount with a minimum loan of $5000 in stablecoins and $500 in fiat currencies. Nexo loans mature in 12 months. The maximum loan amount is equivalent to $2,000,00p stablecoins.

You can withdraw assets at any time. Depending on the loyalty tier, some withdrawals are free; the network fee becomes applicable after that. The threshold value is 83.3%, the lending platform will liquidate collateral if it goes above this.

Nexo doesn’t require KYC.


  • High-interest rates
  • Lending and borrowing features
  • Several supported coins
  • High yielding Interest accounts


  • Support can’t provide answers to due diligence questions
  • Minimum investment amount of $1,000
  • The website has questionable claims
  • Individuals in management have connections to a previously unlawful platform
  • No banking license.

3. BlockFi

BlockFi is one of the best crypto lending platforms run by BlockFi lending LLC, headquartered in New York. BlockFi allows you to open a crypto interest account and deposit cryptocurrencies like Bitcoin, Ethereum, and other altcoins to earn interest rates up to 8.6% APY.

One appealing feature of BlockFi is the interest rate payment flex, which gives users a choice to select the currency of the interest payments without buying more crypto assets.

Automated clearing house (ACH) is something you might have heard before, as most conventional bank transactions use ACH payments. BlockFi asks for permission before processing a payment made from your account when applying for an ACH transfer. The introduction of instant bank transfer makes crypto lending and borrowing fast and easy. BlockFi investors can buy and trade cryptocurrencies directly through a linked bank account. Instant back transfers let them take advantage of market opportunities as they appear without delay.

BlockFi users earn interest with a lending rate of 4.5% APY on Bitcoin and 9.5% on stablecoins. The BlockFi interest account ( BIA) is valued at over $3B and is amongst the most competitive Interest accounts in the cryptocurrency market. Accrued interest is paid monthly at the end of the month. 

BlockFi is more than a borrowing platform; instead, it’s suited to investors of all skill levels. Service managers provide complete information about crypto to beginners. Expert crypto investors can also get support for all their queries.

BlockFi is a platform that lends only to borrowers from the US; you can’t borrow if you’re not a U.S. resident.

Also, BlockFi doesn’t support fiat currencies, which can be slightly limiting. Instead, BlockFi turns your bank or wire transfer into stablecoin GUSD.


BlockFi touts itself as a “fee-free” platform where fees depend on the transaction complexity. BlockFi is a commission-free crypto lending platform with no transaction fee added to trading costs. BlockFi charges withdrawal fees, with BTC and stablecoin users getting one free withdrawal per month.


  • No monthly fees
  • Low fees compared to other crypto lending platforms
  • No minimum withdrawal
  • BlockFi app
  • Insured wallet
  • Regulated
  • No commission fee
  • Available worldwide- except for sanctioned countries
  • Instant trades.


  • Requires crypto knowledge
  • Other DeFi Platforms without KYC cannot access BlockFi services
  • Only accepts crypto tokens: Bitcoin, Ethereum, PAX Gold, and Litecoin
  • No joint or custodial account
  • Loan and APY rate volatility
  • Savings not protected
  • Limited free withdrawal for Interest accounts

BlockFi is a beginner-friendly crypto lending platform with an easy-to-navigate website and mobile apps; however,  it requires some prior crypto knowledge. BlockFi also offers advice on how to pay crypto taxes. 

BlockFi allows users to earn up to 8.6% interest rate APR on BTC, ETH, USDC, GUSD, and PAX.


Cryptocurrency loans are very easy to secure and have a lot of inherent advantages, among them granting financial liberation to people across the globe. However, the volatile nature of crypto assets makes a cryptocurrency loan a risky endeavor.

As an investor, you should conduct your own research and thoroughly consider the interest rates, deposit and withdrawal fees, supported coins, risks associated with each platform, etc., to choose the crypto lending platform that best suits your investment needs.

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