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How to Get a Bitcoin Loan

Digital currencies (cryptos) have revolutionized the world’s financial system ever since Bitcoin was pioneered in 2009 by “Satoshi Nakamoto”. One thing crypto has done well since its introduction is disrupting traditional banking and loan schemes. The growing community of investors in the blockchain currency industry can now use digital assets such as bitcoins as collateral to secure loans from crypto lending sites (YouHodler and Binance). BTC and altcoins loans work much like fiat assets, which means you can borrow money or choose to loan your Bitcoin with interest.

Bitcoin Loans Explained

A typical Bitcoin loan involves a borrower using their crypto Bitcoin funds as collateral to secure cash from lenders at a specified interest rate.

In recent years, several online lending sites have sprung up which allow borrowers to take out loans with ease. Popular examples include CoinLoan and Cred and new lending sites are launched regularly. Most crypto lending platforms work by connecting cash lenders with BTC-investing borrowers. Some lenders also offer loans on coins directly to Bitcoin investors.

It’s possible for lenders to earn a good amount of interest and diversify their income streams through crypto loans.

The major difference between crypto loans and that of fiat is that with the former, the lender basically uses cryptocurrency as collateral as opposed to physical properties.

Perhaps you may be wondering how valuable Bitcoin is today. As of late august 2021, one Bitcoin went for a whopping 48,000 USD. The constantly evolving Bitcoin market presents clear opportunities for growth. Having said that, it can be hard to get a crypto loan from someone you don’t trust. Lenders and borrowers need to trust one another before a loan deal can go through successfully — and this is guaranteed by intermediaries (Bitcoin lending platforms).

If you have an urgent need for money but you don’t want to touch your crypto, you may want to consider exploring multiple lending platforms to find the right deal.

Where can I borrow Bitcoin loans online?

YouHodler Bitcoin loans

On YouHodler, you can get an instant Bitcoin loan anytime, anywhere. So far, YouHodler offers one of the highest loan-to-values for crypto. Buy bitcoins, multiply your assets, and convert your crypto at low fees. With YouHodler’s lending app, getting a BTC loan just got easier. These are available for multi-HODL users.

Are you struggling to find a lender like in P2P? Why not get instant cash from YouHodler’s fiat fund. You could enjoy flexible repayment plans and loan-to-value options.

Binance Bitcoin loan

The Binance exchange is one of the big players in the Bitcoin lending business. The popular exchange offers diverse services such as crypto loans and margin trading or staking to gain high APY. Transaction fees are not involved, interest rates are calculated on an hourly basis, and you can repay your loan at any time.

Who is eligible for a Bitcoin loan on Binance? Once you are a registered user of the Binance exchange, you are qualified to take a crypto BTC loan. Binance Loan accepts BTC and ETH as collateral.

Also see: 4 Tips to Earning Free BTC Cryptos

Types of crypto lending platforms

As explained before, crypto lending environments provide trusted platforms to make borrowing and lending stress-free. You can complete your transaction in a secure and efficient place. The two major types of BTC lending sites are centralized and decentralized platforms. Some crypto sites even allow users to borrow Bitcoin instantly, open crypto savings accounts, and trade all in one place.

Decentralized Finance (DeFi) Bitcoin lending

DeFi lenders operate without any control from central bodies. Rather than being managed by human involvement, computer programs handle Bitcoin DeFi platforms by using smart contracts to automate various tasks. Based on blockchain technology, DeFi transactions are publicly verifiable by anyone on the network — thus, transparency is assured.

When a user borrows BTC from a decentralized Bitcoin lending site, they only need to deposit the digital currency they want to use as collateral. There is absolutely no need for you to share sensitive personal info or worry about your creditworthiness. As long as you choose a unique, reputable, and accessible platform, taking a Bitcoin loan won’t be a Herculean task.

Centralized finance (CeFi) Bitcoin lending platforms

These crypto platforms are operated by central authorities with strict requirements for KYC. Centralized platforms manage and control all their activities by themselves and they often require users to create accounts and follow compliance procedures. Centralized platforms also leverage blockchain tech and render customer support services to their clients.

Ayu

I am a passionate blogger and a digital marketer.

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