3 Best Cryptocurrency Loan Platforms (2020)

• Published: September 15th, 2020
• Updated: September 23rd, 2020

Did you know you can earn interest in the cryptocurrency you already own without taking a lot of risks?

Or use your currency to pay for things without selling it?

Cryptocurrency loan platforms make this possible.

This guide is for people who already own cryptocurrencies and would either like loan it out to earn interest or to borrow fiat currency (eg. USD) using their cryptocurrency at collateral.

With cryptocurrency loan platforms you can either become:

Borrower – Use your cryptocurrency to do things like pay down debt or purchase a home or car without having to sell your crypto.

Lender – Earn compound interest on your cryptocurrency.

Reasons for a Cryptocurrency Loan 

Tax Advantage– Borrowing against your cryptocurrency allows you to avoid the need to pay a capital gain tax because you are not selling your cryptocurrency.

Diversifying Investments  – The borrowed money could help diversify your investments into other assets outside of cryptocurrencies.

Paying off high-cost debt – Often referred to as refinancing. If the interest rate on the loan is less than the interest on outstanding debt you owe then you could use the loan to pay off the higher interest debt.

Key Terms

Collateral Value

The amount of cryptocurrency to put up to get a loan. A lending platform will never give you a loan equal to the total value of the collateral you put up. This means that if you put $1000 of collateral, the platform will not give you a $1000 loan. Often it is much less. The loan that will give you is determined by the LTV rate.

Loan-to-Value (LTV) 

The amount the platform will give you as a percentage of the amount of cryptocurrency you put up as collateral.

For example, if the platform offers a 70% LTV agreement this means that if you deposit $1,000 worth of bitcoin, you will get a $700 fiat loan. ($1000 x 70% = $700)

If a platform gives a 50% LTV agreement this means that a deposit of $1,000 worth of bitcoin will result in you receiving a $500 fiat loan. ($1000 x 50% = $500)

Important: Cryptocurrencies can drastically change in value. If you get a loan, your LTV will fluctuate based on the value of the cryptocurrency. This means that if the price of cryptocurrencies falls, your LTV will go up which will require you to deposit more cryptocurrency to restore your LTV to a lower level.

Interest Rate vs. APR

The interest rate is the interest expense to pay for taking out a loan.

For example, if you take a $1000 loan with a 6% annual interest rate, you would pay $60 worth of interest at the end of year.

The APR includes not only the interest expense on the loan but also all fees and other costs involved in getting the loan. These can include origination, prepayment, loan installment fees. When comparing loans between platforms, the APR is the best apple-to-apple comparison metric.

DeFi vs. Custodial Platforms 

Decentralized Finance (DeFi) is a new area of finance that removes the middleman to facilitate borrowers and lenders. This means people are able to facilitate loans directly with each other using smart contracts.

DeFi is still very experimental and comes with a lot of risks that could result in the loss of funds if bugs or vulnerabilities are found in the smart contracts.

If you’re looking for a more secure platform, custodial platforms are a much better option. These platforms use a centralized company to facilitate loans between users. They often have lower interest rates and have very secure protocols to protect your cryptocurrency.

Loan Platforms


A custodial platform based in New Jersey that offers both cryptocurrency loans and interest accounts. The BlockFi Interest Account (BIA) lets you put your crypto to work and earn up to 8.6%  annually. Crypto loans offer up to 50% LTV, a starting interest rate of 4.5%, and minimum 12-month loan duration.

Click here to read our full review of the BlockFi platform.


A custodial exchange founded in 2018 is the world’s largest and most trusted lending institution in the digital finance industry. They utilize cold storage and top-tier insurance provided by the leader in multi-signature encryption technology (Bitgo). Crypto loans start off at 5.9% APR and interest rate accounts can earn up to 5% on crypto deposits.


A Defi platform founded in 2017, is based in Estonia and is a regulated financial institution licensed under Estonia Financial Authority. Their CoinLoan interest account can earn you up to 10.3% annually without any lockup period.

Their instant loans do not require any credit check and are offered by other users. This means you can assess different loan terms and select the one that best suits your needs.

Key Takeaways

  • Crypto Loan platforms allow you to earn interest on your cryptocurrencies by depositing into an interest account
  • Crypto loans are a great way to access the liquidity of the cryptocurrencies you already own without the need to sell them. 
  • Avoid tax liabilities by taking out a loan
  • The LTV will determine how much of a loan you will get based on how much cryptocurrency you put up as collateral. 
  • Use the APR rate as an apples-to-apples comparison between loan platforms to assess which loans have the best rate
  • There are two types of loan platforms: DeFi which utilizes smart contracts and Custodial Platforms which use a centralized company to facilitate the loans


Julian Editor

Julian has a background in finance from the top business university in Canada. After watching a documentary about an illegal Chinese bitcoin mining farm in 2015, he decided to learn more about the technology behind Bitcoin.

follow me
shape shape shape shape shape shape shape