It is no exaggeration to say that:
Bitcoin will lead, the wave of cryptocurrency adoption !!
Since its humble beginnings in 2009, Bitcoin has grown to become a full-fledged ecosystem where users, miners, developers, and business makers co-exist.
But so far Bitcoin has been touted to fit only for one usecase, i.e. ‘store of value’ but there many other usecases that Bitcoin can be used for and that too right now !!
One of them is Bitcoin lending or Bitcoin loans.
What Are Bitcoin Loans?
Bitcoin loans are simply loans that one can take against their BTC holdings. In BTC loans one needs to keep their BTC holdings as collateral for which they get the extra cash they need in USD or some other stablecoin.
So basically, loans drawn over Bitcoin as collateral are called Bitcoin loans and there many Bitcoin lending programs where borrowers can borrow cash for BTC and lenders can earn extra bucks by lending their BTC.
Top Bitcoin (BTC) Lending Platform & Sites
|Bitcoin Lending Program|
|YouHodler [Recommended]||Get Loan Now|
|BlockFi [For US Customers]||Get Loan Now|
|Celsius||Get Loan Now|
|CoinLoan||Get Loan Now|
|Salt Lending||Get Loan Now|
#1. YouHodler [Recommended]
YouHodler is a FinTech platform focused on providing crypto-backed loans to end-users with fiat currencies (USD and EUR) and stablecoins etc. They have processed $10+ million in loans to customers around the globe.
The most popular ones are BTC and stablecoin loans. As of now, YouHodler supports BTC, BCH, ETH, LTC, XLM, XRP, DASH, REP and other popular cryptocurrencies and tokens.
At YouHodler, you can get loans up to 30,000 USD in cash-flow now for tenure up to 120 days. The interest rates vary for different currencies but are still the best in the industry.
Also, their Loan-To-Value (LTV) is the highest in industry and using YouHodler you can get loans of up to 90% LTV.
#2. Celsius Network
Another company that lends you dollars for your cryptocurrencies is Celsius Network. Celsius is not only a peer to peer crypto lending company but an endeavor to bring the next $100 million people who aren’t connected to banking yet.
This way investors who have extra crypto and want to earn on those without losing the advantage of holding them can again leverage the Celsius network to earn interest back in cash or coins.
At Celsius, you can expect annual rates from 5% to 12% depending upon your collateral and can get loans up to tenure of 1 year at an LTV of up to 50%.
BlockFi is one of the pioneer companies to raise institutional funding for their Bitcoin backed loan start-up. At BlockFi you can borrow from $2000 to $100 million at an LTV up to 50%. The annual rate of interest differs for how much duration one is borrowing, but their lowest starting rate is 4.5 % APR.
To be able to use BlockFi you need to have atleast $4000 or more in crypto, and currently, BlockFi is available throughout the US except (NV, SD, VT or HI).
CoinLoan is another Bitcoin lending platform that provides cryptocurrency loan to crypto holders. But it is a bit different from the previous two we discussed. CoinLoan is a P2P lending platform where borrowers get money without selling cryptocurrencies, and investors offer loan to earn competitive returns.
On CoinLoan you can get loans up to tenure of 3 years and can borrow as little as $50 provided you have sufficient collateral. Another good thing about this platform is that your LTV can be up to 70%.
#5. Salt Lending
Salt Lending touts crypto holders to HODL their crypto and spends their cash.
Through Salt Lending you can get loans from $5000 to $100 million depending upon how much collateral you can put in. The loan APRs start here from 5.99%, and you can get an LTV of 30% to 50% on your Bitcoin (or other Crypto) loans.
How does bitcoin loan work?
Bitcoin loans work similarly as all the other crypto loans.
You can even compare Bitcoin loans with HELOC loans. Heloc loans are home equity line of credit loans where one needs to keep their home as collateral to get the credit line.
But in case of Bitcoin loans, one needs to keep bitcoins as collateral. Once that is done, based on the LTV ratio and the amount in collateral, the borrower has issued a line of credit in USD or a stable coin that he/she can use for other investments or repayment of other expenses.
This provides the borrower the access to extra money without having to give up the advantage of HODLing their bitcoins.
How & where to get bitcoin loans?
It is 2019, and it is more than easy to get Bitcoin loans.
To get Bitcoin loans, you need not go through heavy documentation, KYC checks or credit history checks that one usually goes through in traditional lending & borrowing.
Instead, for Bitcoin loans, you need to submit minimum documents for your identity check, and you need to have bitcoins that you are willing to collateralize.
Usually, this process only takes a few minutes, and your application of loan is done. After which in a day or two max, your application is reviewed.
Upon review and underwriting, your loan is originated within 45-90 minutes.
So, you see how simple the process is.
But where does this all happen?
Well, all this process of getting a Bitcoin loan is applicable for the bitcoin lending platforms that we have mentioned in the previous section.
Through these platforms, you can quickly get Bitcoin loans by following this simple process, which is more or less similar for all the BTC lending platforms.
Why Take A Bitcoin Loan?
Many Bitcoin investors are here for the long term, and they believe in slowly accumulating as many bitcoins as possible.
But despite their long term vision these investors also need liquidity for various other needs such as for vacation, repayment of a loan, or to buy a car, etc.
In such cases, if they sell their bitcoins, they will lose their competitive advantage of holding BTC for the long term !!
Enter, Bitcoin loans to resolve this…
Bitcoin loans resolve this dilemma of BTC holders who want liquidity without selling their BTC positions. That’s why it makes more sense for BTC investors to borrow extra cash for their BTC holdings instead of selling them outright.
Moreover, Bitcoin and crypto lending will become more than obvious in the coming days because financial usecases such as lending, borrowing, insurance, savings accounts, etc. make more sense if done through blockchain-based cryptocurrencies.
So that’s all from our side in this introductory round-up of Bitcoin loan platforms and how one can take Bitcoin loans? Also, check out our recommended best crypto lending platforms, if you wish to borrow/lend against any other currency than Bitcoin.
Now you let us know: What do think of Bitcoin loans? Which platform is the most suitable for borrowing & lending using Bitcoin? Do let us know in the comments section below 🙂
Share this article with your friends who are interested in Bitcoin & crypto loans !!
Hey there! I am Sudhir Khatwani, an IT bank professional turned into a cryptocurrency and blockchain proponent from Pune, India. Cryptocurrencies and blockchain will change human life in inconceivable ways and I am here to empower people to understand this new ecosystem so that they can use it for their benefit. You will find me reading about cryptonomics and eating if I am not doing anything else.