As uncertainties rise in traditional financial markets, more and more people are turning to the cryptocurrency markets. As a result, crypto lending platforms have been growing in popularity.
If you are looking into lending or borrowing cryptocurrency, take a look at our list of the top 5 crypto lending platforms. We will review each one in detail below.
Quicklook: Best Crypto Lending Platforms
- BlockFi: Best Option All Around
- Nexo: Best for High Security
- Binance: Best for Wide Range of Crypto Supported
- Aave: Best for Uncollateralized Loans
- Celcius: Best for Competitive Interest Rates
5 Best Crypto Lending Platforms
Borrowing crypto can help you take bigger risks and take advantage of the crypto markets. Lending crypto also gives individuals the opportunity to make very attractive profits.
Learn more about out top 5 best crypto lending platforms below to jumpstart your journey.
BlockFi
BlockFi is quickly becoming the go to platform for lending and borrowing crypto. With more than $10 billion in crypto assets under management, this platform has built up a solid reputation.
Along with providing a platform to borrow and lend crypto, BlockFi also serves as a platform to trade crypto assets as well as offers a BlockFi Rewards Credit Card that pays rewards in crypto. BlockFi lends in 45 different states and is known to be the largest, quickest, and most affordable crypto-asset backed lender in the country!
Standout Features:
- Borrowing rates as low as 4.5% APR
- Allows you to use your crypto as collateral
- Receive funds within one business day
- Bitcoin, Etherium, or Litecoin to USD loans
Benefits:
- Highly secured platform with multi-factor authentication (MFA)
- Pay back without penalties, no prepayment penalties or fees
- Mobilized financial services
- Institutional and retail lending
Disadvantages:
- You can only borrow up to 50% of the value of your crypto assets
- Interest rates can be subject to change
- No FDIC or SIPC insurance
Lending Duration: 12 months
Minimum Loan Available: minimum $5,000 loan amount
Supported Assets: Bitcoin, Litecoin, Ethereum
APR: 4.5%
Nexo
Nexo is another highly credible lending platform that is licensed and regulated in 200 countries. Along with providing loans, Nexo also acts as an exchange for trading crypto as well as provides earnings on assets.
With over $13 billion in assets under management, Nexo continues to expand as a platform. They offer a full range of digital asset management services.
Standout Features:
- No credit checks required, borrow without a credit score!
- Military grade security with 265-bit encryption and cold storage
- Insured up to $375 million
Benefits:
- Zero fees / no hidden fees
- Borrow in over 40 different stablecoins and fiat currencies in exchange for 1 of the 20 different options you can use as collateral
- Interest rates start at 0% APR
Disadvantages:
- 4 tier system determines your APR
- If sufficient funds are not available in your savings wallet for repayments, Nexo will automatically take part of your collateral to make up for the difference
Lending Duration: 12 months
Minimum Loan Available: minimum $50 loan on stablecoins, $500 for fiat currencies
Supported Assets: 40+ fiat currencies, USDT, USDC
APR: starts at 6.9% but never rise above 13.9%
Binance
Best for Wide Range of Crypto Supported
Binance is a crypto marketplace intended for individual and institutional investors, located in the United States. This platform offers trading pairs, staking, OTC trading and more, all with minimal fees and a wide range of cryptocurrencies supported.
To borrow crypto from them, they offer Binance Loans and Binance Margin. Binance Margin provides funds through a third party whereas Binance Loans is a financial service that can provide shorter term liquidity.
Standout Features:
- No transaction fees
- All registered users can borrow loans
- Borrow 65% of assets used as collateral
- Binance loans qualify for Loans Staking on Binance to reduce interest
Benefits:
- Low interest rates, calculated hourly
- Repay at any time
- Can be used for any transactions and can even be withdrawn
Disadvantages:
- You will be charged 3X the hourly interest if you are late on repayment
- Not available in all U.S. states
- B- rating due to number of complaints by the BBB
Lending Duration: 7, 14, 30, 90, and 180 days
Minimum Loan Available: No minimum, loan amount will be calculated as 65% of collateral
Supported Assets: around 72 different cryptocurrencies available as loans, 30 different types of crypto can be used for collateral
APR: interest rates are calculated at the time of purchase, by the hour
Aave
Best for Uncollateralized Loans
Aave was initially designed to act as a lending and borrowing platform of digital assets and cryptocurrencies. Unlike the other options we mentioned, Aave offers both collateralized and uncollateralized loans. These uncollateralized loans are called Flash Loans and are the first of their kind in DeFi.
With a tremendous market size that is continuously growing, Aave is surely a great platform for those looking into lending and borrowing crypto.
Standout Features:
- Uncollateralized loans allow users to obtain loans without any initial capital
- Significantly larger liquidity pools compared to competitors
- Stable interest rates
Benefits:
- Offers collateral swaps
- Transparent and completely open infrastructure (open source protocol)
- Instant borrowing
Disadvantages:
- Flash loans can potentially be exploited by hackers
- Small number of wallets supported
- Collateral can be sold automatically in the case of default
Lending Duration: there is no fixed duration of when the loan needs to be payed back by
Minimum Loan Available:
- The amount available to borrow will depend on the amount of collateral you deposit. Generally, the loan to value ratio ranges from 40%-80%
- For flash loans, you will be able to borrow any available amount of assets
Supported Assets: 30+ digital assets supported
APR: depending on the asset being borrowed, APY ranges from 0% to 16.16%
Celsius
Best for Competitive Interest Rates
Celsius is known for their simple and easy to follow process to borrow a loan. This platform is perfect for beginners and those looking to make a passive income.
They also offer one on one assistance by appointment, to provide additional support to their customers. Overall, Celsius is a great option for those just starting out in the world of crypto.
Standout Features:
- You pick your loan amount, desired interest rate, and payment plan
- Earn interest on your collateral
- Fee free services
Benefits:
- Operates in 150 countries
- Basic dashboard and easy to use website makes Celsius ideal for beginners
- No credit approval required
Disadvantages:
- Highly centralized
- Limited crypto selection as Celsius does not have their own exchange
- Celsius has the right to freeze, suspend, and close your account without advanced notice
Lending Duration: the minimum loan term is 6 months
Minimum Loan Available: simply request how much you are looking to borrow in your loan application
Supported Assets: 44 digital currencies available to use as collateral, 6 cryptocurrencies and USD available for borrowing
APR: starts at 0%, but does not exceed 8.95%
What Is Crypto Lending?
Crypto lending is when investors lend their cryptocurrency for borrowers, in exchange for interest payments. Borrowers will purchase crypto backed loans, which are considered secured loans.
Digital assets are usually used as collateral, however more recently, noncollateral crypto loans have become available. Crypto backed loans work similarly to traditional loans in that there will most likely be credit checks, collateral, interest rate payments, and a specified length of maturity.
How Does Lending Crypto Work?
To obtain crypto lending, there are a few general steps that can apply to all platforms. Most platforms will require a credit check (but not all), in order to get approved for the loan.
Once you get approved and choose your desired loan amount, you will be notified of how much collateral your loan requires. This depends from platform to platform, however Celsius now provides the first ever no collateral loan in DeFi! The interest rate at which you are borrowing funds will also be communicated to you.
Once your collateral is deposited, and your loan is approved, the funds should be transferred to you fairly quickly. Unlike traditional loans, crypto loans can be almost instant.
What to Consider With Crypto Lending Platforms
Before taking out a crypto backed loan, here are a few things to consider.
Privacy & Security
Borrowing from a platform that is secure is crucial to ensuring you are protected from attacks and fraud. Especially with the recent increase in digital theft and cyber security concerns.
For example, if the platform you are borrowing from gets attacked; there is a potential that all of your money could be stolen. To avoid this, added security measures like two factor authentication and cold storage can reduce the likelihood of this happening.
Competitive Lending Rates
Before accepting an offer, make sure you are using a platform that provides competitive interest rates. Rates will most likely be variable, meaning they are subject to shifting in accordance to changes in the market.
Without a fixed interest rate, there is no way to be 100% confident that the rate you are initially presented will be the continuous rate of interest. This is why choosing a platform that is known for their competitive rates, will help protect you from any unavoidable added expenses.
Number of Cryptocurrencies Supported
Find a platform that offers a wide range of cryptocurrencies to ensure that what you need will be available to you. It is also a good idea to choose a platform that supports a larger range of cryptocurrencies as this will provide you with more flexibility.
Lending Duration
All platforms have different lending duration offerings. Depending on your financial goals and desires, the duration of your loan will vary.
Lending durations will also play a role in varying interest rates so it is important to time the durations with market cycles.
Expenses & Fees
Added expenses and fees you owe a platform can quickly erode a low interest rate. Double check all of the hidden fees you will owe your platform before accepting a loan.
Jumpstart Your Crypto Journey
There are several opportunities to take advantage of currently in crypto markets. Consider making the most of these opportunities with a crypto backed loan.
If you are still unsure of where to start or if this is the right decision for you, reach out to your financial advisor for additional assistance! They are here to answer your questions and guide you onto the right path.
Frequently Asked Questions
Yes, you can lend your crypto to borrowers and earn profitable interest on it.
Platforms vigorously implement risk controlling measures to ensure that both the lenders and borrowers are safe. One of the most common ways to ensure security is through collateral.
Crypto lending allows individuals to lend their crypto assets to borrowers through crypto backed loans.
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