As cryptocurrency lending goes mainstream, the questions surrounding them have begun to increase. As these loans are generally new concepts within the overall community, it’s important to not only understand them, but also know which cryptocurrency lending platforms are reputable, which ones offer the best rates or advantages, and which ones are outright scams.
As a result, we’ve created this guide to overview the best Bitcoin lending sites and also provide insight as to platforms we believe you can trust. We’ll give an overview about cryptocurrency loans then delve directly into not only why it’s useful but also how to get your own Bitcoin loan. As human beings, we want things as fast as possible, and that applies to information, knowledge, beneficial results, and money. Many times we want to have access to something immediately, but aren’t able to, such as with money: In this case, banks and ‘creditors’ have for a long time been able to offer us money immediately as long as we promise to pay back whatever they lend us within a specific amount of time. Btc loans and other cryptocurrency loans can be very confusing, have multiple types, and are relatively new, so let’s compare them to things we might be accustomed to get a better understanding. eToro - Our Recommended Crypto Platform First, look at how loans work in the modern day: Please keep in mind, our stance isn’t to complain and state why banks are bad and crypto/Bitcoin is bad, it is more to spread knowledge on possibilities for institutions such as btc loan sites and banks so that they can grow the global GDP and progressive human development for the better. There are a few issues with traditional btc lending models because: As a result, Bitcoin and cryptocurrency loans were created. Quick bitcoin loans not only expedite the review and application process to make it faster for both businesses and users looking to get loans, but also cuts expenses associated with the process exponentially, and opens up lending opportunities for larger amounts of people who otherwise can’t access them. For top crypto lending platforms, businesses, and banks, the profit margin for trusting others with your capital becomes even larger as well. There are multiple types of fundamental Bitcoin loans, so let’s review. The Peer to peer (P2P) Bitcoin lending model is equivalent to modern-day peer to peer lending platforms. In these ecosystems, users with Bitcoin sign up for a platform and lend Bitcoin that they put ‘Up for Lending’. Peer to peer lending platforms select how much interest rate they get for lending Bitcoin, maximum repayment term, and specify the additional parameters in this section. Then, other users sign up for the bitcoin p2p lending platform and choose from the list of user-provided loans. These models are more common in combination with collateral-based Bitcoin loans. The arguably most revolutionary crypto/Bitcoin loan type is the LTV/Collateralized loan model. In this bitcoin lending model, a specific asset (Something with value) is put up as collateral for the loan. Collateral is traditionally some form of value that is locked-up and used in lending to 1.) Ensure that the loan will be repaid, and 2.) Give the lender confidence to issue a loan as you already own something in similar value. For example, completely unrealistic, but let’s say someone offered you a loan of $10,000 but before that, you have to keep $5,000 worth in jewelry with an escrow account. In this case, if it ever becomes apparent you’re not going to pay off the loan, the $5,000 worth of jewelry will be sold to pay for the loan. That might be confusing, but keep in mind it’s just an example, let’s get more into the details. While collateralized loans are apparent in legacy finance, they are much more efficient and quick when used in cryptocurrency. A loan-to-value (LTV) ratio is important to understand in this case: LTV ratio is an indicator of the value of certain collateral compared to the loan that has been given. This is very common in real estate and has been transferred more apparently for Bitcoin and crypto loans. LTV ratios are demonstrative of how close or far your loan is from liquidation, or selling your underlying collateral in order to pay back the loan. Confusing? Probably – so let’s use the image and scenario to assist: Bitcoin LTV loans are revolutionary: A user will log on to a Bitcoin LTV platform and request a certain amount of United States fiat currency, let’s say $100,000, which is usually placed on a 50% LTV ratio standard. As a result, in order to be loaned $100,000, you need to first to deposit $200,000 in cryptocurrency, most namely Bitcoin. The price of Bitcoin is at the time of borrowing, $100,000. Let’s say months go by and you’re still making payments for the $100,000 loan. Let’s say the value of Bitcoin falls to $5,000. Since your LTV ratio is 50%, the Bitcoin that you’ve stored with the lending platform will, as a result, be sold, meaning liquidated to ensure that the loan payment is made. Below, you can see how LTV’s are used in real-estate focused loans for at which point the loan will default. The same concept applies to crypto and Bitcoin loans, however, just replacing real-estate with Bitcoin or different crypto. Bitcoin/Cryptocurrency loans have a few major benefactors that some consider places them as better options above all other loans or types of lending. Let’s have an overview of the main advantages of getting a bitcoin loan: So now that you understand what a bitcoin loan is, how to get a bitcoin loan, the advantages of lending bitcoin over traditional loans and how they work, let’s review the top cryptocurrency lending platforms to help you find a reliable lender. If you’re looking to get bitcoin loan instant because you have an emergency at home that needs immediate financial support, you can check out some of the bitcoin loans below that can help you get btc loans instantly provided that you have some cryptocurrency holdings in your crypto wallet. If you prefer to get a bitcoin loan without going through credit score check that exists when you get traditional bank loans, then it’s highly recommended that you check out some of the btc lending platforms below that don’t need identity and credit score verification. If you’re looking to get a bitcoin loan without collateral, then it’s highly recommended that you stop doing that now because there is no such thing as a bitcoin loan without collateral. If someone tells you that he can give you free bitcoin loans or a bitcoin loan without you giving him some of your cryptocurrency holdings, then there is a high chance that he is scamming you! You should check out below the best cryptocurrency lending platforms that offer several cryptocurrency collateral options as well as high LTVs. For those looking to get a Bitcoin loan in the UK, we highly recommend Nexo, as it is supported and fully functional at this time for UK residents. Kiva works in the UK as well. Bitcoin and cryptocurrency lending is among some of the most revolutionary, game-changing technological developments in quite a long time. They open the door for a plethora of subsequent profit, in both cases of lending and being lent a certain amount of funds. For absolute beginners in Bitcoin that are still confused by this guide, check out our main how to buy Bitcoin which details the ins and outs of this complex, new technology or you could also check out this article on how to buy Bitcoin with debit card.
Yes! Most if not all crypto bitcoin lending platforms enable loans without looking at all at your credit or previous finances.
In most cases, Bitcoin loans are issued only if loan collateral is enabled, as to hedge from that exact situation from ever happening.
Feel free to reach out to our team at InsideBitcoins to assist you in understanding bitcoin loans if this is the case. In other cases, most if not all crypto lenders have dedicated 24-7 service at your disposal.
Yes, absolutely! As a matter of fact, many use crypto P2P lending as viable money makers.
While currently, the market is fairly small and early as far as crypto lending platforms, we highly recommend Nexo as it seems to be the most profitable and be the most regulated option.
This depends per platform, but they are usually very small. For example, Kiva's minimum loan amount is $25. What is Bitcoin Lending?
The Issues With the Traditional Lending Model
The Peer to Peer (P2P) Bitcoin Lending Model
Loan to Value (LTV) / Collateralized Bitcoin Loans
Advantages of a Bitcoin Loan over a Traditional Loan
Best Bitcoin Lending Platforms 2024
Instant Bitcoin Loans
Bitcoin Loans Without Verification
Bitcoin Loans Without Collateral
Best Bitcoin Lending Site by Country
Conclusion
FAQs
Can I get a Bitcoin loan without credit?
What happens if I can't pay back my Bitcoin loan?
I'm still not confident I can get a Bitcoin loan without messing up. Help?
Can I make money doing P2P Bitcoin lending?
Which crypto lending platform is best?
Are there minimum Bitcoin loan amounts?
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