You might have come across the word ‘crypto’ often. With everything going digital, people are moving towards digital ways of making money. We are now being introduced to digital currency, digital wallets, and things that are making our lives easy.
So if you are curious about what cryptocurrency really is then please understand that it is a form of currency exchange just like paper money. However, the coin ownership records, including transaction history and transfer verification, are in a computerized database online.
Lately, crypto lending has become popular, with investors earning interest. It is a digital trade promoted by the best crypto lending platforms that deposit money in coins such as Bitcoin, Ethereum, etc.
What is a Crypto Loan?
Crypto lending is an indispensable investment, where investors loan ruling cryptocurrencies to other borrowers in exchange for special interest. It’s important to know what you should be proposing. Once you hold an idea of what you want in a lending platform, it’s a lot easier to attain decisiveness.
Before investing in crypto, you should know about these terms:
- Interest rates
- Security
- Assist Cryptocurrencies
- Flexibility
What is a Crypto Lending Platform Used for?
Crypto lending is a P2P Platform for crypto deposit loans. Borrowers deposit a definite quantity of cryptocurrency as their collateral. Then the platform offers the benefit of being able to conserve their crypto assets with their flexible lending terms. No credit checks are required; instead, convenient methods are available for withdrawing funds. In addition to this, all the transactions are SSL encrypted. Best crypto lending platforms are registered and licensed by European Union.
What are the Risks Involved in Crypto Loans?
There are many benefits of crypto loans that are very fascinating, but it is important to keep some risks in mind before investing in crypto. Below are some risks associated with crypto:
- Liquidity and Value: Borrowers commonly face the inborn challenge of providing liquidity should their insurance esteem drop under the necessary worth. They need to do this to guarantee that banks are in every case entirety. That means borrowers need to carefully screen their security proportion to ensure that it’s anything but a protected reach.
- Technology: There are many computational complexities included in crypto lending. You might encounter a glitch or any other problem associated with technology. Also, there are some technical limitations to crypto-lending.
- Taxation and Regulation: It gets hard for a person to comprehend the tax implications of their crypto lending practice properly. A good choice for clients is to discuss with a tax consultant.
What to Look for in a Crypto Lending Platform
Are you searching for the best crypto lending platform? There are several things to consider, especially as a beginner. Check out the following points when in search of the best crypto lending platform:
- Interest rates: Interest rates are significant to consider when dealing with crypto lending. If you want to lend, you need a higher financing cost so that your crypto is working for you. In case you want to borrow, a lower interest rate is normally better.
- Security: Make sure that your crypto is in safe hands, and any trustworthy lending platform should understandingly outline what privacy mechanisms they have set up.
- Supported cryptocurrencies: It’s also imperative to consider which digital currencies the platform deals with, particularly if you’re a lender. Most lending platforms accept Bitcoin and Ethereum, yet on the off chance that the entirety of your assets is in altcoins and stablecoins, you may have to search for different choices. Any good crypto lending platform should have cryptographic forms of money they acknowledge recorded on their landing page.
- Flexibility: Flexibility concerning credit terms is another thing that should be considered. Some best crypto lending platforms have fixed terms that you can alter to suit your necessities; others let you choose the terms for yourself.
- Geo-restrictions: Something you might not have come across is that some crypto lending platforms have geo-limitations or restrictions. It implies that you will most likely be unable to join a lending platform if you’re in a specific locale. Subsequently, you ought to consistently verify whether you’re ready to enlist for your foundation of decision.
Crypto Lending Platforms Comparison
| Celsius | YouHodler | BlockFi | Crypto.com | Binance | Coinloan | |
| US Citizens? | Yes | No | Yes | Yes | Yes | No |
| Min. Loan Amount | $500 | $100 | $5,000 | $250 | $1 | $100 |
| Lending Denaturation | Unlimited | Unlimited | Unlimited | Up to 90 Days | Up to 90 Days | Up to 90 Days |
| # of Coins | 41 | 25 | 10 | 35 | 58 | 18 |
| Max Stablecoin APR | 13.3% | 12.7% | 9.3% | 12% | 7% | 12.3% |
| Max Crypto APR | 6.35% | 7% | 6.5% | 6.5% | variable | 7.2% |
Crypto Lending Platforms Explained
Here is our listing of the six top-rated cryptocurrency exchanges and investing or trading platforms.
The crypto offers that appear on this site are from organizations from which The College Investor receives compensation. This compensation may affect how and where products appear on this site. That includes, for example, the order in which they appear). The College Investor does not include all cryptocurrency exchanges, or all crypto offers available in the marketplace.
- Celsius
Celsius offers excellent interest rates for cryptocurrencies on deposit. You can also borrow USD at low rates. Furthermore, you may send someone cryptocurrency via the Celsius app without having prices tacked on. It is available in the US, where lending denaturation is unlimited, and the minimum rate of the loan is $500. There are 41 coins available on the Celsius platform.
- YouHodler
YouHodler is a blockchain-based financial program focused on cryptocurrency-backed lending with fiat loans. This crypto lending platform gives USD and EUR loans secured by collateral in BTC, ETH, XRP, and different popular cryptocurrencies. It has a simple pricing structure, available on both mobile and desktop. It is not available in the US, where lending denaturation is unlimited, and the minimum rate of the loan is $100. There are 25 coins available on the YOUHOLDER platform.
- BlockFi
BlockFi is a secured non-bank lender that offers USD loans to crypto-asset owners who collateralize the loan with their crypto-assets. Their products deliver extra liquidity to the blockchain asset sector and meet the needs of each individual and institution holding blockchain assets. BlockFi has clients’ Bitcoin and Ether with a registered custodian and troubles loans in USD to their bank accounts.
Currently operating in beta launch, lending in 35 US states to retail buyers and companies. It is available in the US, where lending denaturation is unlimited, and the minimum rate of the loan is $5000. There are 10 coins available on the BlockFi platform. It does not support tokens and coins, and withdrawals are limited, whereas some pros are that no fees are taken.
- Crypto.com
Crypto.com was founded in 2016 on the crucial principle that a fundamental human right for everyone to control their money, identity, and data. Crypto.com serves over 10 million clients today, with the world’s fastest-growing crypto app, along with the Crypto.com Visa Card — the world’s maximum widely available crypto card, the Crypto.com Exchange, and Crypto.com DeFi Wallet.
Available in the US, where lending denaturation is up to 90 days, the loan’s minimum rate is $250. There are 35 coins available on the Crypto.com platform. Cons include complicated fee structure and limited customer support, whereas pros include many coins and tokens.
- Binance
Binance is a centralized online exchange that offers customers a range of financial products and services. That includes buying and trading a wide range of digital currencies, in addition to digital wallets, futures, securities, savings bills, and even lending. Also, available in the US, where lending denaturation is up to 90 days, the loan’s minimum rate is $1, and the total number of coins is 58.
- Coinloan
CoinLoan is a crypto-assets platform that aims at the demand that can not be satisfied by the standard credit system. It offers borrowers the maximum favorable conditions and lenders with the entire repayment of their funds and the absence of risks. Any user can be a lender or a borrower.
It is not available in the US, where lending denaturation is up to 90 days, and the minimum rate of the loan is $100, and the total number of coins is 18. The official website is https://coinloan.io.
Are Crypto Lending Platforms Right For You?
Cryptocurrencies have been actively revolutionizing and disrupting financial systems in current times. Crypto markets are becoming increasingly popular. While a few platforms have been around for several years, 2019 saw an increase in more crypto lending platforms.
However, the crypto lending platforms include risk and unpredictability. Crypto lending platforms do have their benefits as they enable you to access cash without having the need to sell your crypto. That cash can be utilized to enhance your position and for dealing with living expenses. If you want to try crypto lending, the above-mentioned platforms are some of the top picks to go for.
Author Bio
Eddie Segal is an experienced web analytics specialist and tech writer. He covers subjects from finance, cloud computing to agile development to cybersecurity and deep learning. He is also the project manager of Best Small Business Loans and content strategist for many technology brands.