Crypto & Bitcoin Loans: The Ultimate Guide and 5 Best Sites in 2020

Why not consider a Bitcoin loan in 2020? 

There are many reasons to get one (which I’ll explain later).

In this article, I will provide you with the ultimate guide on bitcoin loans. Including:

  • The 5 best Bitcoin loan sites
  • The 11 factors to consider when choosing your Bitcoin loan site
  • How Bitcoin loans work
  • The many benefits of Bitcoin loans, and how you can profit from them
  • 4 reasons why you should take advantage of a Bitcoin loan to do more out of your capital.

Let’s go. 

This resource is for borrowing crypto. If you HODL crypto and would like to earn interest on it, check out our 5 Best Crypto Lending Sites.
  • The 5 Best Bitcoin Loan Sites

    Dozens of bitcoin loan sites exist. 

    Each of them offers competitive rates, different loan-to-value ratios, and many great benefits. 

    But they’re not equal. Some stand head and shoulders above the rest. 

    And the best crypto loan sites in 2020 are BlockFi, YouHodler, Bankera, Coinloan, and Lendabit.

      Cryptos Avail. Competitive Advantage  
    BTC, ETH, LTC, 4+ stablecoins Reputation & Security Borrow on Blockfi
    BTC, ETH, 12+ stablecoins/altcoins Turbocharge & MultiHodl features Borrow on YouHodler
    BNK, USDT, BTC, ETH, XEM, and DASH Best Loan-to-value offers Borrow on Bankera
    BTC, ETH, 5+ stablecoins/altcoins Variety of P2P loan options Borrow on Coinloan
    BTC, USDT, ETH Low origination fee Borrow on Lendabit

    Now, let’s compare my favorite crypto loan platforms.

    You’ll see how to borrow money using your crypto as collateral and stay safe doing it.
     

    #1 Blockfi

    BlockFi was founded by Zac Prince and Flori Marquez. The company has raised over $20 million from firms, including Coinbase Ventures. 

    They have an experienced team with plenty of top tier advisors. This means they strive to provide great customer service and security of funds.

    Pros

    • Low interest rate. Rates range from 4.5% up to 9.75%, which can be lower than most credit cards and typical bank loans. 
    • High security. Your crypto assets are stored with Gemini. This 3rd party depository trust is a licensed custodian with insurance and has a perfect track record void of hacks or customer fund losses. In fact, Gemini works with many lending sites and other cryptocurrency websites you might use.
    • Refinance options. BlockFi is the only lending platform that lets borrowers refinance their loans at the end of their loan term for different rates and lengths. 
    • Same-day funding. Borrowers can access their loaned cash within the same day they complete their application. 
    • Standard origination fee. Blockfi charges borrowers a standard 2% origination fee.
    • Trading. BlockFi offers the ability to exchange crypto pairs between BTC, ETH, LTC, USDC and GUSD.

    Cons

    • Limited cryptocurrencies available. Only BTC, ETH, LTC and GUSD are available to be deposited as collateral by the borrower. 
    • Not FDIC insured. Though Gemini -- their wallet provider -- has a strong track record for security.

    Countries available

    BlockFi is available to clients worldwide, with a few exceptions. 

    For example, because legal restrictions haven’t caught up yet, Blockfi is not available to users located in countries on the U.S. list of sanctioned countries. 

    Additionally, though BlockFi is available to 48 U.S. states, it is not available in New York and Connecticut, for example. 

    Collateral currencies available

    BlockFi allows you to use BTC, ETH, LTC and GUSD as collateral. 

    Loan currencies available

    You’ll be able to borrow and receive USD, GUSD, or USDC directly into your bank accounts or wallet in less than 90 minutes. 


    #2 YouHodler

    YouHodler is an EU and Swiss-based company with two main offices: Limassol, Cyprus and Lausanne, Switzerland. T

    They began operations in 2019 and have been a rising star ever since thanks to their customer service and loan products.

    Pros

    • Trust. YouHodler is an active member of the Blockchain Association of Financial Commission and the Crypto Valley Association. 
    • Interest rate. YouHodler offers rates from 5% to 13%, depending on how much collateral you put up. 
    • Up to 90% loan-to-value. Many platforms require you to deposit twice the worth of your loan (50% LTV). With YouHolder, you can deposit less if you need to.
    • Instant. Get instant cash loans and crypto loans in EUR, USD, USDT or in BTC depending on your collateral.
    • $1 million insurance fund. YouHodler created their own insurance fund to make sure their customers feel safe.
    • 18+ cryptos for collateral. If you have bags of cryptocurrencies in the top 12, you can use them as collateral for a cash loan.
    • Multi-HODL. Their app has a feature to use part of your loan for speculating in crypto.

    Cons

    • Lacks experience. They are growing rapidly, but their reputation is not as solid as others.
    • Risky features. Some functions, like TurboCharge (borrowing crypto to buy more crypto), can be risky for new users.

    Countries available

    YouHolder is available in the E.U. and U.K., but not to customers in the U.S. 

    Collateral currencies available

    YouHodler supports 18+ popular cryptocurrencies and tokens, including BTC, BCH, BNB, ETH, LTC, XLM, XRP, DASH, and REP.

    Loan currencies available

    You can receive payments in Euro, USD, BTC or USDT depending on which crypto you choose as collateral.


    #3 Bankera

    Bankera is a London-based firm that started off as SpectroCoin in 2013 by a group of Lithuanian developers. 

    The team created a blockchain-based cryptocurrency exchange, wallet, and payment card that’s accepted anywhere bitcoin is accepted.

    Now, the team has created Bankera, a very good platform to borrow Bitcoin, altcoins and fiat.

    Pros:

    • The BNK Banker token. Choose to pay and use their native BNK token and receive up to a 3% reduction in your interest rate.
    • High LTV rate. You can choose up to 75% loan-to-value rate.
    • Low minimum loan. You can get a loan that’s as little as 25 Euro.
    • Flexible repayment. Pay back your loan in full anytime.

    Cons:

    • Interest rates. 9.95% to 15.95% interest rate when the interest is paid in non-BNK coins.
    • Lacks insurance. No insurance funds to protect customers.

    Countries available

    Bankera is available worldwide. 

    Collateral currencies available

    BTC, ETH, XEM, DASH.

    Loan currencies available

    You can receive payments in Euro and a few cryptocurrencies: USDT, BNK, BTC, ETH, XEM, and Dash.


    #4 CoinLoan

    CoinLoan isn’t a company like the others. It is one of the first P2P crypto borrowing platforms for crypto-backed loans.

    They have a simple setup process, bank-grade security, and they offer crypto borrowing and lending in various cryptocurrencies.

    Pros:

    • Trust. Partnered with Ontology, bitcoin.com, and Acquiring.
    • Variable Rates. Lenders and borrowers choose rates. Check the platform for all currently available rates.
    • High-grade security: All crypto assets are stored on cold multi-signature wallets with distributed key storage.
    • Flexibility. Borrowers can make early loan repayment with no penalties.
    • Frictionless. CoinLoan charges no fees for depositing and withdrawing funds on the platform and these fund transfers are at the speed of crypto.
    • Always open. Licensed financial institution status and worldwide coverage allow them to offer service almost anywhere and anytime, day or night.
    • Transparency. A unique loan agreement for each loan is generated, and users can export loan history to CSV for accountability purposes.

    Cons: 

    • P2P reliant. Since borrowers and lenders need to find each other, there are fewer of them than most platforms. Perhaps best to wait for the P2P network to grow so you can borrow or lend crypto more easily. 

    Countries available

    CoinLoan is available worldwide. 

    Collateral currencies available

    Borrowers can deposit as collateral Euro, USDT, USDC, PAXOS, BTC, TUSD, ETH, BTC, LTC, XMR, ONT, CLT.

    Loan currencies available

    Currently, you can take a loan in USD, EUR, GBP, RUB, BTC, ETH, LTC, XMR, TUSD, USDC, PAX, USDT, EURS, DAI. 


    #5 Lendabit

    Lendabit is a fairly new platform. They don’t have as much experience or customers as other platforms, but they partnered with BitGo for their wallet services and insurance.

    Their Bitgo partnership increases their credibility and makes it worthwhile to consider. 

    Pros:

    • Security. Funds are safely protected by multisig technology, BitGo custodial services and 2FA.
    • 0% interest for 45 days. After 45 days the rates go from 5% to 15% 
    • Pay interest later. Don’t worry about weekly or monthly payments, just pay the interest at the end of the loan.
    • Flexibility. Borrowers can make early loan repayment with no penalties.
    • BITGo Wallet services. They are partnered with BitGo, which eliminates risks and increases transparency through their wallet service. 
    • Insurance. LendaBit.com guarantees 100% insurance coverage through BitGo for all supported cryptocurrencies. BitGo covers all insurance costs and deductibles.

    Cons:

    • New platform. Low liquidity, traction, and user reviews.
    • No fiat credit line. You can only withdraw your borrowed money in USDT.

    Countries available

    Lendabit is available worldwide. 

    Collateral currencies available

    BTC, ETH, USDT

    Loan currencies available

    BTC, USDT


    [Bonus] NEXO

    Nexo, which was also profiled by Forbes, was founded in 2017 and is backed by the founder of TechCrunch: Michael Arrington. 

    They have nearly 200,000 customers and back payments in 45 Fiat currencies.

    Pros:

    • High flexibility. Repay your loan anytime. 
    • Low interest. Starts at 5.9%, though they do go higher with the various plans Nexo offers.
    • Top-notch user experience. You won’t find better anywhere else.
    • High security/insurance. The platform is SOC 2 Type 2 certified. BitGo Custody carries $100 million USD in insurance protections.

    Cons: 

    • Crypto available. Although borrowers can withdraw in 45+ fiat currencies, lenders can only deposit stablecoins and fiat currencies. You’ll need to find another site to earn interest on your crypto. 
    • Medium Rates. Some platforms offer lower interest rates. Though they require more collateral or shorter repayment terms.
    • Punishment for non-NEXO coin users. APR without staking NEXO tokens is 11.9%. 

    Countries available

    NEXO is available in the U.S. and E.U.

    Collateral currencies available

    BTC, ETH, NEXO, LTC, BNB, XRP, BCH, EOS, XLM, PAXOS, and 20 more. 

    Loan currencies available

    You can receive payments in USD, Euro, and 45+ total fiat currencies.

    In addition to instant USD and EUR loans, Nexo customers can also borrow instantly using a stablecoin such as USDT, which they can then exchange for a preferred cryptocurrency and/or convert into fiat. 

  • Best Crypto Loan Rates Compared

    Choosing Bitcoin loan sites with the best rates for borrowers will allow you to get the most bang for your buck. 

    So let’s take a look at just the rates each of these five crypto loan sites offers.

      Borrow (currencies) Collateral (currencies) Interest rate LTV ratio Terms
    Blockfi USD, GUSD, USDC BTC, ETH, LTC and GUSD 4.5% to 9.75% 20% to 50% 12 months
    YouHodler Euro, USD, BTC or USDT Total of 18+ including BTC, BCH, BNB, ETH, LTC, XLM, XRP, DASH, and REP. 7% to 15% 50% to 90% 30, 60, 90 up to 150 days
    Bankera Euro, USDT, BNK, BTC, ETH, XEM, and Dash BTC, ETH, XEM, DASH 6.95% to 15.95% 50% to 75% 12 months
    CoinLoan USD, EUR, GBP, RUB, BTC, ETH, LTC, XMR, TUSD, USDC, PAX, USDT, EURS, DAI Euro, USDT, USDC, PAXOS, BTC, TUSD, ETH, BTC, LTC, XMR, ONT, CLT Variable by lender 5% to 70% 7 days to 36 months
    Lendabit BTC, USDT BTC, ETH, USDT 5% to 15% 50% to 95% Variable by P2P Lender
  • Selecting Your Crypto Loan Site: 11 Factors To Consider

    A great bitcoin loan site is not necessarily the best for you specifically. 

    You might need a loan that can be repaid instantly or a loan with a long repayment period. 

    Consider these factors below to determine what, exactly, you’re looking for.
     

    1. Reputation

    In the crypto world, reputation goes a long way. 

    Check the platform's reputation among customers and read their reviews. 

    Be sure to check the reputation of the people running the company too. 

    BlockFi, for example, has a very strong reputation. 

    They’re located in New Jersey and they’ve been featured in Bloomberg and Forbes. 

    Their founders, Zac Prince and Flori Marquez, as well as the BlockFi team all have significant experience. 

    Their security measures for keeping collateral safe are also top-notch. All this contributes to their strong reputation. 
     

    2. Rates

    Rates vary a lot between the sites. 

    They are so different because they depend on how much collateral you dedicate, how long you want the loan to last, and other factors. 

    Bankera, for example, has standard rates ranging from 6.95% with a 25% LTV, to 9.95% for 50% LTV, and 12.95% for 75% LTV. 

    Source: Bankera
     

    Keep in mind this is only if you elect to pay interest in BNK coins; BNK coins are Bankera’s own cryptocurrency

    If you choose to pay interest in any other coin, then the rates jump 3% to 9.95%, 12,95%, and 15.95%.

    To sum it up, rates can change drastically within one platform, and even more from one platform to another one. 

    So make sure to submit the same loan conditions between platforms and see which one offers you the best rates. 
     

    3. Duration

    Do you need a short loan or a loan for longer? 

    Some of these platforms allow you to pay off your loan whenever you want. Other loans lock you into the loan. 

    Each one is different, so be sure to be clear on how long you want to be paying interest.
     

    4. Terms

    Are there any hidden fees? Are there prepayment penalties? 

    Make sure nothing surprises you. Carefully read the terms.

    If you need a quick injection of funds that you plan to pay back soon, then Coinloan offers loans for a duration of only 7 days. 

    On the other hand, if you’re looking to buy something bigger like a car and need to spread your larger loan out for longer, then you can consider a Bankera loan for 12 months. 

    BlockFi, for example, lets you repay your loan early with no fees. 

    That way, if you get a surprise bonus of cash, you can apply it to your loan to help reduce the total amount of interest you’ll end up paying.
     

    5. Security

    Remember the old crypto saying: not your keys, not your coin. 

    All these platforms require you to give them some of your cryptos; that’s how collateral works. But they won’t be able to pay you back if it’s stolen. 

    Make sure they use cold wallets and other security measures. 
     

    6. Insurance

    Some of these platforms offer insurance. 

    They hold insurance in case hackers breach their security measures 

    If you’re putting in more collateral than you’re willing to lose, then make sure they have insurance in case something bad happens. 
     

    7. Verification

    All these platforms need to verify your ID in order to be in business. 

    After all, if someone launders money through them, law enforcement can shut them down. 

    But make sure they are storing your ID and other forms of verification in a safe way. 
     

    8. Currencies 

    The best bitcoin loan sites need to offer a lot of currencies for collateral and borrowing.

    Lendabit concentrates on BTC, ETH and USDT exclusively. 

    This helps them keep tight security, but you’ll need to look somewhere else if you want to borrow various cryptocurrencies, stablecoins or fiat currencies. 

    Coinloan, on the other hand, lets you borrow over 12 currencies and use 14 currencies as collateral. 
     

    9. Speed

    Traditional loans from banks take several days to process. 

    After you apply, you need to wait for them to check your credit, get loan officers to sign off, and then deposit your loan amount.

    DeFi loans are much faster. 

    BlockFi, for example, says that “clients can apply in less than 2 minutes and we can go from application-to-funding in as few as 90 minutes.”
     

    10. Limits

    Another difference between DeFi platforms and traditional loans which you should consider are loan limits. 

    Traditional banking won’t lend small amounts at low interest rates. It’s simply not worth their time or cost. 

    Credit cards let you “take out cash” but it comes with steep fees.

    YouHolder, by contrast, let’s you take out a loan as low as $100 (in case you need to pay a quick bill).

    What about if you want to buy a home? 

    Lendabit lets you borrow a maximum of 535 BTC. You can buy a very comfortable home for that amount. 
     

    11. Geo-restrictions

    As a result of KYC and AML laws, some platforms may not be available to users in certain regions. 

    When considering a platform, be sure to check which regions it operates in.

  • Top 4 Reasons To Get a Crypto Loan

    HODL -- it stands for Hold On For Dear Life. It’s an effective strategy. 

    You don’t lose money by selling at the wrong time. Instead, you wait until the height of the next bitcoin bull run. 

    In the meantime, however, you need cash. 

    Here’s a few great reasons to put your bitcoin up as collateral instead of selling it. 
     

    1. You need funds to trade

    Do you see a killer trade? 

    You want to make it but all your crypto is tied up. 

    If you instead take out a loan from one of the best bitcoin loan sites, you can use your existing crypto for collateral and get another crypto to trade with.

    After you make your trade, you can pay back your loan and get your collateralized crypto back. 

    YouHodler, for example, has a Turbocharge service which allows you to get a chain of loans.

    Source: YouHodler
     

    You set YouHolder to use your borrowed fiat to purchase additional cryptocurrency without commission. 

    Then, those additional purchased cryptocurrencies are used as more collateral for additional loans. 

    It’s like a chain of loans. 
     

    2. You need funds to spend

    Perhaps you want to buy things and prefer to use BTC -- like something from one of these companies on our ultimate list of places to spend bitcoin

    Or maybe you need fiat to buy a car, computer, or other large expense. 

    Instead of cashing out your crypto and regretting it when the price skyrockets, why not put it up for collateral and get cash instead?

    Lendabit lets you borrow a maximum of 535 BTC.

    Source: LendaBit
     

    That will cover a car, a house, a remodel of your kitchen, your kid’s college tuition, a hot tub in the backyard, anything and everything you can think of. 

    And at the end of the loan, you can withdraw your crypto collateral and, if prices went up, sell it for a profit. 
     

    3. Tax payments

    Did you know that cryptocurrency is treated as property by the IRS -- and by most developed countries? 

    Owning crypto is similar to owning stocks, bonds, and other forms of personal property. 

    If you sell your crypto and sell it for more than you bought it, this is considered a “capital gain” by the IRS, and you must pay taxes on it.  

    Exchanging crypto-for-crypto is also a taxable event that must be reported.

    But borrowing money against your crypto is NOT a taxable event

    This makes crypto lending sites like BlockFi a great way to gain access to the money you need without having to sell your crypto investments and then pay taxes on top of them.
     

    4. If you need funds right now

    Life can throw some unexpected problems our way.

    Sudden car repair, medical bill from an accident, unexpected home repair from storm damage, etc. 

    Sometimes we might not have the cash to cover it right away.

    Coinloan has a pretty cool feature: instant loans. 

    There’s no way you’d be able to get instant loans with traditional loan platforms and institutions. 

    Cool, right? 

  • Bitcoin Loans vs Regular Loans

    If all these platforms are relatively new and still somewhat risky, why shouldn’t you just get a regular loan? 

    After all, regular loans from traditional banks are a well established, secure method of paying your expenses. 

    Or are they?

    This table highlights the top differences.

    Regular Loan Crypto Backed Loan
    Requires credit check No credit check
    May need collateral 100% needs collateral
    Higher APR from 12% to 24% or more Lower APR from 4% to 12%
    Can take days to process Process instantly and get funds fast

    A traditional loan takes a while. 

    This is due to the credit check they are required to perform. 

    If you have low or medium credit, they’ll charge a high APR. 

    Even with a high APR, unless you’re applying for a credit card, they will ask for some form of collateral (your home for a mortgage loan, your car title for a car loan, etc). 

    Using crypto-backed loans helps you speed up the process while avoiding high APR and credit checks. 

  • What Are Bitcoin Loans? How do they work?

    Bitcoin loans are most similar to refinance loans on mortgages. 

    When you take out a refinance loan on a mortgage, you are giving the lender collateral (the legal title to your home) in exchange for a loan of cash.

    Source: Wall Street Survivor YouTube Channel
     

    When you repay your loan and interest, you get the title back.

    Bitcoin loans work by taking your bitcoin or other cryptocurrency and holding it as collateral. 

    When you repay your loan plus interest, you get your bitcoin back. 

    The best bitcoin loan sites secure a borrower's loan by keeping their crypto as collateral. 

    If the borrower fails to pay back their loan, their bitcoin is sold to cover it. 
     

    How do crypto loan sites profit from this?

    They make money from this operation in various ways. 

    Most charge an “origination fee” of around 2% on your loan amount.

    If you borrow $1,000, you pay $20 to the site. This is in addition to the interest rate you agreed on.

    The best bitcoin loan sites will keep your crypto as collateral and give you a loan in the fiat or stablecoin of your choice. 
     

    Is crypto’s volatility dangerous for my loan?

    Keep in mind that crypto loans are affected by crypto’s volatility. 

    If the price of the bitcoin you gave as collateral drops too much, the loan site might have to sell it to cover the loan. 

    If you’re afraid of your crypto collateral being liquidated due to price drops, then it’s best to put a large amount in as collateral so the price has room to go up and down.

  • How To Borrow Bitcoin In 5 Simple Steps.

    The best bitcoin loan sites have one thing in common: the steps to register and start borrowing.

    1. Register on the site.
    2. Complete KYC. 
    3. Deposit the collaterals of your choice. 
    4. Select terms (interest rate, length of time to repay, etc)
    5. Withdraw your loan in the form you selected, whether that’s cash or crypto.

    Repayment is equally as simple.

    1. Transfer the amount of cash or crypto to repay your loan and fees.
    2. Withdraw your collateral or start a new loan.
  • Borrowing Crypto is a Simple Decision

    It ultimately comes down to one question: 

    Are you ready to use your crypto as collateral for a loan or not?

    There are pros and cons to this, and I hope this article has helped you think about them. 

    No matter how you answer, the best bitcoin loan sites are blazing a new path for personal finance and banking. 

    Bitcoin and cryptocurrencies are throwing open the doors to financial choice and freedom. 

    More Awesome Resources:

  • FAQ

    Who can get a Bitcoin loan?

    Anyone who has bitcoin or cryptocurrencies to put as collateral. 

    The best bitcoin loan sites do not require credit checks nor need you to fill out long applications, wait days for an answer, or worry about getting rejected. 

    All you need to qualify for a bitcoin loan is enough cryptocurrency to deposit as collateral. 

    Then, at the end of the term, you will have to repay the loan to get your crypto collateral back. 

    Can I get a bitcoin loan without collateral?

    No. You will need to use collateral to secure the loan. 

    Without collateral, there’s nothing to secure the loan against default. 

    Can I get a bitcoin loan while staying anonymous?

    No. The best bitcoin loan sites all require you to register and submit KYC documents. 

    This is because these sites are all registered financial service companies. 

    In order to offer financial services, they are required by law to know their customers to prevent money laundering and other nefarious activities. 

    What if I miss my bitcoin loan payments?

    It depends. Each crypto loan site has different policies. 

    Some of them charge a late fee for one or two payments before selling your collateralized crypto; others will put your crypto up for sale right away. 

    Some sites don’t even have monthly payments; you just need to pay off the interest when you pay off the whole loan. 

    What happens to my crypto if prices drop?

    It may be sold. 

    All crypto loan sites require a certain loan-to-value in collateral. 

    For example, if you want to borrow $1,000 and are required to deposit a 50% LTV, then you need to deposit crypto worth $2,000. 

    Now, if the price of that crypto drops by 50% or more, the loan site will be forced to sell your collateralized crypto to protect lenders from losing money. 

    How fast can I get my loan after applying?

    Sometimes in 90 minutes or less. 

    If you choose to get your loan in a stablecoin, then most of the best bitcoin loan sites will deposit your loan amount into your wallet very soon after you submit your loan request. 

    If you choose to get your loan in fiat currency, you will receive your loan amount in the time it normally takes to process a standard fiat transaction. 

    Do I need to repay my loan with the same funds as I took out?

    Not necessarily.

    The best bitcoin loan sites accept payment in various forms. 

    If you took out a loan and got stablecoins, you might be able to repay in fiat. 

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Posted by R.R. Hauxley

R.R. Hauxley traveled around the world ... 1 year on 1 Bitcoin. 20 countries, 12 months, 1 Bitcoin. He wrote a book about it: Stolen Wallets and Where to Buy Them. Along the way he met and interviewed the sharpest, brightest minds in crypto today: Vitalik Buterin, Charlie Lee, and more. Today Rafael educates the crypto curious and delves further into the incredible world of blockchain.

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About CryptoManiaks

We are CryptoManiaks.  Collectively, we have over 25 years of experience in the crypto world and are all passionate about guiding people through the complex world of crypto investing.

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