As Bitcoin and other cryptocurrencies gain more ground in many jurisdictions, there is a greater demand for credible cryptocurrency lending programs with avenues for investors to earn interest on their holdings and obtain crypto loans.
Unlike the traditional financial institutions, an increasing number of decentralized finance (DeFi) startups are now providing cryptocurrency investment options where users can earn dividends and have access to funding through loans.
By utilizing Bitcoin crypto loans sites, you can arbitrage (buying an asset and simultaneously at a higher price in the same market) your way to more gains on your account.
Some of these offers allow you to invest cryptocurrency and earn interest directly, whereas other blockchain-based platforms allow you to invest fiat and earn cryptocurrency as interest. There are advantages as a borrower or a lender.
Let’s take a look at the accessible crypto lending sites for securing a loan and generating investing income.
It should go without saying that wise investors make their money work for them. Your money could multiply if you invest it in the proper programs and platforms.
• The prices of digital assets like Bitcoin are always fluctuating, hence when it comes to returns, annual yields fall between 3%-17% and crypto lenders sell their collateral as soon as it reaches a loan-to-value (LTV) of 90%.
• Celsius claims to be one of the most trusted and fastest crypto lending platforms as lenders on the platform can earn between 5% and 21.49%% annualized percentage yield (APY) on their cryptocurrencies with their LTV ranging between 25% and 50%.
• BlockFi borrowers can get an interest rate of 6.2% on BTC and 3.3% on ETH both available for deposits under 100 ETH and 10 BTC.
SEE ALSO: How to Get Bitcoin Loans Without KYC
Let’s see in detail the 9 best crypto loan platforms for easy access to loans:
1. Salt Lending
Salt Lending is one of the most well-known crypto loan services on the market today. The platform allows you to utilize cryptocurrency as collateral to receive a loan ranging from $5,000 to $25,000,000.
This loan option provides a handy source of capital for those whose initiatives would otherwise be rejected by banks and other potential investors. However, before you take out the loan, make sure you verify the interest rates. The standard APR is from 14% to 15.95%, which is much more than any conventional lender.
Of course, the high APR is the price you pay for having access to an unorthodox source of capital: you can obtain a large sum of money without having to go through a credit check or other comparable procedures.
As collateral, you must deposit cryptocurrencies into Salt Lending. Bitcoin, Ethereum, Litecoin, Dash, Dogecoin, USDT, and True USD are among the digital assets that are acceptable.
While SALT primarily focuses on loans, Crypto.com provides a multi-purpose platform and mobile application with a wide range of functionalities.
Since its inception in 2016, one of its guiding principles has been that financial liberty is an inalienable human right for everyone. As a result, Crypto.com provides its customers with a plethora of options that enable them to purchase, sell, trade, invest, or borrow cryptocurrency.
There are certain additional benefits to investing in the platform’s digital currency (MCO). These benefits include interest percentage rates (raising investment IRs by more than 2% depending on the asset, and lowering loan IRs by 4%).
Celsius was founded in 2017 for a similar reason as Crypto.com: customers should not only have more control over their money, but they should also have additional investing possibilities other than traditional banks.
Since the 2008/2009 recession, interest rates have been exceptionally low, ranging from 0.5 percent to 2 percent. This is why Celsius Network stands out: the platform stresses a flexible investment system with higher annual returns for long-term investors.
As we’ve come to anticipate from these types of platforms, interest rates fluctuate depending on a few factors. Celsius, on the other hand, is a little different in that the interest rates you might earn have an unpleasant tendency to vary to some degree.
INLOCK is a cryptocurrency lending platform that has its native token, ILK. You can borrow money using cryptocurrency as collateral or earn interest by depositing money on the site.
INLOCK offers a simple, no-nonsense user interface. The website’s top page offers two options: Get Credit or Earn Interest.
If you’re borrowing money, you’ll click Get Credit and then enter the amount you require. You can choose any amount you want as long as you’re ready to deposit the collateral. You can use BTC, ETH, LTC, or BNB as collateral. You also get to choose the rate of over-collateralization.
The more collateral you have, the cheaper your interest rate will be. You can also choose the length of your loan, which can be 10, 30, 45, 60, 120, or 180 days. INLOCK will automatically compute your loan plan, allowing you to know precisely how much you can expect to pay.
Meanwhile, if you wish to earn income on your crypto assets, select the ‘Earn Interest’ option. Choose how much you wish to lend (there is no limit as long as you have the cryptocurrency to lend).
Then, decide on your annual interest rate and loan term (15, 45, 80, 100, 200, and 300-day loans are all available). INLOCK quickly displays your expected profit and then publishes your loan offer to their system.
SEE ALSO: Where to Find and Use a Bitcoin ATM
This one-of-a-kind exchange not only provides loans and borrowing but also allows you to trade like any other cryptocurrency exchange. The startup, situated in San Francisco, bills itself as “the most powerful open trading platform for crypto assets.”
dYdX Exchange allows you to open short or leveraged positions with leverage up to 4x for trading on margin with borrowed capital.
Alternatively, you can use your existing crypto holdings as collateral to borrow any supported asset directly to your wallet.
As a lender, you can deposit cash to earn interest constantly throughout time, with variable interest rates guaranteeing you always get the market rate.
One of the most significant features of dYdX is that it is a trustless system, which means that there is no need to trust the counterparty in any trades or loans. During difficult times, you retain complete control over your funds.
6. Nuo Network
Nuo Network, which can be found at Nuo. network, allows you to lend and borrow cryptocurrency without actually handing over custody of your cryptocurrency to a third party.
Nuo additionally provides unique crypto choices that some of the larger suppliers listed here do not. For example, you can borrow or lend USDC, DAI, ETH, BTC, SNX, and TUSD.
Lending and borrowing rates are completely upfront and transparently revealed. SNX, for example, is currently available to lend for 8.4 percent and to borrow at 24.9 percent APR.
All loans can be tailored to the borrower’s specific requirements. Users can borrow long and short-term loans at preferential interest rates and terms. A smart contract is used to collateralize all loans, resulting in a trustless environment.
Crypto investors have been denied access to basic financial instruments in the blockchain ecosystem for years. BlockFi bridges this gap by giving clients globally access to high-interest crypto accounts and low-cost credit products.
BlockFi and other crypto loan platforms are closing gaps left open by traditional banks. BlockFi, like Celsius, focuses primarily on the twin fields of investing and lending, allowing the platform to offer reasonable rates to both lenders and borrowers.
Helio Lending allows you to obtain cash by using BTC, ETH, LTC, and XRP as collateral. As long as you have collateral, the minimum loan amount is $1,000 and there is no maximum.
You have the option of repaying the loan in 1 to 12 months. Your APR is modified based on the loan-to-value ratio (LTV). You can return the loan with either interest-only payments or principal and interest payments.
Helio Lending provides same-day loan approval. You transfer your crypto collateral to Helio’s secure storage address after registering and getting accepted. The platform then deposits fiat dollars into your bank account. You make monthly payments until your debt is paid off.
Helio Lending, unlike the other platforms featured above, does not allow you to lend your cryptocurrency to borrowers. Helio, on the other hand, manages all loans immediately. There is no peer-to-peer marketplace here.
Cred, which can be found at MyCred.io, is one of the more renowned names in the cryptocurrency lending market. The company accepts more coins than any other loan platform on this list.
Cred is also well-regulated and reputable: all loans are provided or arranged following the California Finance Lenders Law, and Cred has its license number confirming its lender status.
Cred has partnered with BitGo (for custody) and Lockton to increase security (for insurance). Cred is also a co-founder of the Universal Protocol Alliance. Bitbuy, TrueUSD, Bitcoin .com, Angelrock, and Uphold have also worked with the company.
Cred can be used in two ways. To begin, you can profit from your crypto holdings by pledging them to Cred and earning competitive interest rates. You can also use your cryptocurrency as collateral to gain access to USD, EUR, and other fiat currencies.
Frequently Asked Questions (FAQ)
1. Can you get a loan to invest in Crypto?
Yes, you can, as you can make use of your crypto assets as collateral while you want to collect a loan to invest in crypto.
2. Is Celsius or Blockfi better?
Celsius seems to have a better range of options when compared to Blockfi as Celsius offers higher rates for its stable coin interest account and has better offers for Bitcoin and Ethereum.
3. Can Blockfi be hacked?
Blockfi can be hacked just like every other crypto exchange holding people’s crypto assets. If this happens, lenders and borrowers would lose their deposits and collateral in the process.
4. Are crypto savings accounts safe?
Crypto savings accounts are not necessarily safe as they are not backed by FDIC Insurance hence there is a slight possibility that you could lose your money if the value of your investments drops due to crypto fluctuations.
As demand for funding increases globally, crypto loan alternatives is a growing decentralized service cryptocurrency owners could explore. New crypto lending platforms emerge giving crypto users more opportunities to borrow and invest while expanding the cryptocurrency industry.
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