If you don't want to get rid of your cryptos but would like to unlock a cash loan with them, Crypto Loans are a new alternative in the DeFi space. Crypto Loans allow you to access money while continue holding your Crypto stake.
What are crypto loans?
Crypto lending platforms open a revolving door for users: they allow you to:
Provide liquidity to the protocol: You may deposit your Crypto to earn interest.
Access a Loan with your cryptos as collateral: Hodlers may consider crypto lending granting access to fiat cash liquidity without selling your cryptocurrencies. You may also borrow Crypto with your Crypto as collateral to trade, use leverage, futures, withdraw or spend the money.
How to Borrow Cash or Crypto using Cryptocurrencies as Collateral
Choose the type of platform (Protocol) you are going to use. As always in Crypto, you can manage with centralized (CeFI) or decentralized (DeFi) protocols. CeFi apps issue loans that emulate traditional banking infrastructure and regulations. For example, CeFi apps have regulatory protocols such as Know Your Customer (KYC) and Anti Money Laundering (AML); they frequently use Cold Wallets and offer deposit insurance. On the other hand, crypto loans in DeFi do not have custody or integrate regulatory protocols, so they only require a deposit guarantee to receive a loan.
Once the protocol is selected, choose the app and create an account.
Deposit your Crypto and apply them to a Loan. You will have to choose the currency you want to borrow, opting for a percentage of the cryptocurrency value in your account. Usually, you may access 40% of your crypto value.
Once you get your cash, you can repay it with monthly instalments and pay off the balance when ready.
Top Crypto Lending Platforms
YouHodler: YouHodler is an EU, and Swiss-based FinTech focused on crypto-backed lending with fiat (USD, EUR, CHF, GBP), Crypto (BTC) and stablecoin loans (USDT, USDC, TUSD, PAX, PAXG, DAI, HUSD), crypto/fiat and crypto/crypto conversions, as well as high-yield crypto-saving accounts (crypto-rewards & staking). The platform supports BTC, BCH, BNB, ETH, LTC, XLM, XRP, DASH, HT, REP and other popular cryptocurrencies and tokens.
Coinbase: Coinbase allows you to borrow 30% of your balance, with a minimum of $2,000. You will pay 8% APR, without any credit check.
Binance: The largest Crypto market also has the alternative of getting a loan. On Binance, you can request up to 65% of your collateral value, with a maximum period of 180 days. Borrowed assets can be used for any transaction and may be withdrawn.