A crypto-backed loan is one of the most exciting wonders of blockchain technology. Today we will tell you a little more about this crypto world and the best platforms to enter.
The best crypto lending platforms
We know that banks always ask for guarantees when they lend you money, be it real estate, stocks or any other type of asset. So a crypto-backed loan has very similar procedures, but the assets here are cryptocurrencies, and the lenders are modern and exciting platforms where you can go over the entire process in one app.
The rates offered on these cryptocurrency lending platforms vary by platform, but are generally competitive.
Before we get to the platforms, let’s look at the concept of LTV. Loan-to-value (LTV) simply means how much crypto you will need to collateralize before getting a loan.
Therefore, the lender will hold this until the loan is paid in full. The reason for this is to minimize the risk to the lender. At the same time, users can also access larger loans at lower interest rates by placing guarantees.
The 4 highest LTV crypto loan platforms
Founded in 2014, Nebeus is a European platform that allows its users to use their investments in digital assets to obtain crypto-backed loans.
Thus Nebeus is one of the oldest existing platforms on the market, which makes them highly reliable. Additionally, Nebeus recently partnered with Bitgo, allowing them to secure all crypto collateral deposited by their users, up to $ 100 million from Lloyds of London.
One of the best features that Nebeus has is the ability to customize crypto loans according to the needs of each individual.
With Quick Loans, Nebeus users can earn 50% LTV and 0% interest rate for 3 months. With flexible loans, Nebeus users can choose their interest rate and LTV and can take the LTV up to 80%! Therefore, crypto users can borrow up to € 250,000 for up to 36 months while maintaining the same 80% LTV. The combination of a high LTV and a 36-month term puts Nebeus at the top of the list of crypto lending platforms with the highest LTV.
In addition to loans, Nebeus offers other services that make it one of the most complete platforms out there. From cash transfers around the world to mobile phone recharges and even the ability to lend Nebeus your crypto to earn interest every 24 hours.
BlockFi is the leading crypto-backed lending platform in the US, but it is also well known globally.
Since they are primarily based in the US, BlockFi users can only borrow in USD. In terms of collateral, users can deposit Bitcoin, Ethereum, and Litecoin.
Likewise, the value of LTV in BlockFi rises to only 50% and there are no other options. This low LTV may be a turn-off for many, but BlockFi is targeting crypto users who want to get larger loans and for particular use cases and needs. Its low LTV helps minimize the risk of users hitting a trigger event or margin call.
Also, it is worth mentioning that BlockFi currently manages approximately $ 15 billion in digital assets, which shows how popular the platform is.
This crypto loan platform provides various top-notch services and offers different types of loans.
You can get crypto-backed loans in stablecoins, crypto, and multiple fiat currencies. In terms of LTV, YouHodler attracts users with an LTV of up to 90%, making it the highest LTV on the market. However, this LTV is only for a maximum period of 30 days. The next LTV is 70% for 60 days and 50% for 180 days.
YouHodler accepts approximately 18 different types of crypto as collateral for its loans, making its platform attractive to people who own multiple digital assets. As an official member of the Crypto Valley Association in Western Switzerland, YouHodler is well known in Europe and has a considerable share of the crypto loan market.
4. Red Celsius
This world-famous crypto asset management platform offers a number of crypto services. Its core service is crypto savings accounts, which allow people to earn with their assets.
Likewise, crypto-backed loans also play a key role in the platform’s ecosystem of products and services. Celsius offers different LTV ratios, but the highest is 50% for a maximum period of 36 months. The next LTV is 33% and the lowest is 25%.
These low LTV rates put Celsius at the bottom of the list for crypto lending platforms, but since crypto secured loans are not their main product, this is understandable. Celsius continues to be one of the highest rated platforms with over 500,000 users. Also, it is relevant to mention that the mastermind behind this is Alex Mashinsky, who founded Voice over IP.
Cryptocurrencies are proving to be a game changer in every possible way. Crypto-backed loans are another way this technology challenges traditional norms in the financial industry.
In this regard, it is reaching a point where people can no longer just ignore cryptocurrencies and the blockchain. Right now, you can participate or stay behind. So how do you think crypto will shape our spending culture and financial industry in the nearest future?