Compare Crypto Loans

Even if your holdings are relatively small, they can be used as collateral for a crypto loan.  This can be an effective way of increasing your liquidity when you need it, but only if you use it correctly. That means making sure you’re comfortable with the repayments you’ll need to make each month, alongside any other financial commitments you already have.

In traditional markets, this type of lending is called securities-based lending, but it is typically off-limits to all but high-net worth clients of private banks and large financial institutions. In contrast crypto loans are much more accessible to clients of average net worth and offer long term hodlers a way to free up some of their funds without the need to offload any of their crypto assets.

Compare Crypto Loan Providers

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What is a crypto backed loan?

Crypto-backed loans are secured loans. Borrowers use their crypto assets as collateral for loans, just like your house or car is used as collateral for your mortgage or car loan.

Will a crypto loan provider credit check me?

Although you would need to check each providers criteria separately, in general credit checks are not run for crypto backed loans.

How Does a Crypto-Backed Loan Work?

Crypto loans allow users to borrow and lend cryptocurrencies for a fee or interest. You can instantly get a loan just by providing some collateral in the form of your crypto assets. Loans are available through a DeFi lending DApp or a cryptocurrency exchange.

How Collateral Changes Can Lead to a Margin Call

A margin call occurs when one or more of the securities, in this case cryptocurrency, held in the margin account has decreased in value. When a margin call occurs, you must choose to deposit additional funds into the account so that it is brought up to the minimum value, known as the maintenance margin.

What is the Loan-to-Value (LTV) Ratio

Loan-to-value (LTV) ratio measures the relationship between the loan amount and the market value of the cryptocurrency securing the loan.
If a lender provides a loan worth half the value of the asset, for example, the LTV is 50%. As LTV increases, the potential loss the lender will face if the borrower fails to repay the loan also rises, creating more risk.

How to Make Major Purchases with a Crypto-Backed Loan

One of the most common questions crypto investors have is whether they can buy a house or a car, with their crypto assets. Unfortunately, mortgage providers don’t accept crypto as collateral and even if you take out a Crypto backed loan many conveyancers will not accept any proceeds from your crypto assets as payment for a property. The solution would be to simply withdraw the funds and place them in a savings account for 6 moths prior to making a purchase.