Best Rates for Crypto Loans
Since 2017, one of the safest ways to produce yield or borrow money to pay off debt has been through crypto.
The idea behind it is very straightforward: consumers open an account with a crypto loan provider, fund it, and the provider lends money (to institutions and retail borrowers with collateral requirements), as well as to crypto mining pools, de-fi initiatives, and other ventures that provide a profit. Depending on the company’s policy, the yield may be distributed at varying rates every day, every week, or every month, ranging from 3 to 14 percent annually, depending on the asset.
An introduction to over-collateralized borrowing
Collateralized crypto borrowing is almost instantaneous, doesn’t require a credit check for approval, and has interest rates that are much lower than what banks or credit cards charge. You can use it to pay off your credit card, get you through the month, or replace a crucial part of your home or car.
Once your account has been funded, you must choose the loan’s term and LTV Loan to Value, which refers to how much collateral you will offer in relation to the loan’s principal. For instance, if the LTV is 50%, you would need to deposit $20,000 in cryptocurrency, however if the LTV is 25%, you will need to invest $40,000 in cryptocurrency.
We know how fickle the cryptocurrency market is, and the USD value of the collateral may suddenly drop below the LTV criterion you specified. In this case, you may be forced to produce additional collateral (to match the initial LTV) to repay the loan, depending on the loan provider’s policy. If not, the company may liquidate the loan, in which case you would lose the collateral.
Best cryptocurrency lenders
The minimum loan amount varies each organization and can range from $100 to several million dollars, but for comparison, we’ll look at six-month loans for $10,000 using Bitcoin as collateral and a 50% LTV (because most of them only provide that).
Best cryptocurrency lenders
Best borrowing offer: 1% to 0.7% APR
10k loan at 50% LTV: 6.27% paid in CEL or 8.95% paid in cash
Yield on BTC: 4.74% APY no lock up
Code: WEB30, $30 in BTC for depositing $200, locked for 30 days
The first cfi company to offer yield on balances and loans for cryptocurrencies is Celsius. Currently, it provides loans with LTVs of 25%, 33%, and 50% for 34 cryptocurrencies with terms of 6, 12, 24, and 36 months. The greatest deal on the site is for the safest 25% LTV loans, which come with a 1% APR rate regardless of the loan size and term, or a 0.7% APR rate if the loan repayment is made in CEL, the company’s token.
Nexo
Best borrowing offer: 5.9% APR
10k loan at 50% LTV: 11.9% or 5.9% with a NEXO stake
Yield on BTC: 5% APY
Another cryptocurrency lender is Nexo, which offers yield on 17 cryptocurrencies as well as GBP, USD, and EUR fiat money. The NEXO token offers a boost on yield and improved borrowing rates, just like Celsius and CEL. You must hold at least 10% of your portfolio in NEXO tokens to qualify for the 5.9% APR borrowing rate.
Blockfi
Best borrowing offer: 6.73% APR at 20% LTV
10k loan at 50% LTV: 12.5% APR
Yield on BTC: 6% APY
Signup Code: $10 in BTC for $100 deposit
Crypto.com
Best borrowing offer: 8% APR
10k loan at 50% LTV: 12% with a 2,500 CRO stake or 8% with a 25,000 stake
Yield on BTC: 6.5% – 3 month lock up with a 25k CRO stake
Signup Code: n74pck9z9s, $25 of CRO for staking 2500 CRO ($160) for their 2% cashback debit card
Even though their borrowing service isn’t the greatest on this list, CDC is by far one of the biggest participants in the market with more than 5 million customers worldwide. But other aspects of the market, such yield generated on deposits, cashback debit cards, and exchange services, are where CDC really shines.
