Learn everything you need to know about the 15 best crypto loans, the best crypto lending platforms, how crypto loans work, and the different kinds of crypto loans - including flash loans, crypto loans without collateral, and more. ⚡💰
Wondering about the best companies for bitcoin and crypto loans? Finding the best crypto loan starts with picking the right lending platform for you. So if you're asking yourself "what's the best crypto loan out there?" you’ve come to the right place! That's why we've rounded up 2023’s top crypto loan contenders.
There are a lot of crypto lending platforms available - and after the collapse of crypto lending platforms like Celsius and BlockFi in 2022, it's never been more important to consider the liquidity and security of your crypto lending platform when you compare crypto loans. Following the crashes, Celsius and BlockFi investors were left unable to close their positions or access their collateral. Lenders similarly lost access to their assets, with millions of dollars tied up.
In other words, it's never been more important to know you're using a trusted crypto lending platform in 2023, which is why we've carefully curated our list to include reputable crypto lending platforms. That said, to fully understand the risks involved, you should always do your own research before using any lending platform.
Considering a crypto loan? Here are some of the best crypto loans to research in 2023:
As one of the largest centralized crypto exchanges - Binance crypto loans are a solid bet from a crypto lending platform with a solid reputation.
Learn more about Binance loans, and discover how Koinly calculates Binance taxes fast.
Another huge and well-trusted crypto exchange - Coinbase lets investors borrow cash against their BTC, making these loans ideal for investors who need liquidity in the short term but don’t want to sell their crypto.
Learn more about Coinbase loans, and discover how Koinly calculates Coinbase taxes fast.
You can borrow up to 50% of your crypto collateral with Crypto.com credit, with a flexible credit calculator tool that lets you set most of the terms of your loan.
Learn more about Crypto.com loans, and discover how Koinly calculates Crypto.com taxes fast.
Aave is one of the largest DeFi lending protocols and offers both collateralized crypto loans and uncollateralized flash loans. Due to the high LTV rates - you’ll find very low-interest rates in return.
Learn more about Aave, and discover how Koinly calculates Aave taxes fast.
Compound Finance was one of the original DeFi lending platforms and a pioneer in the market. To this day, it remains a very popular option for those looking for a DeFi loan.
Learn more about Compound Finance, and discover how Koinly calculates Compound Finance taxes fast.
Nexo is a popular crypto lending platform for users worldwide - although the company has just recently withdrawn many services for US residents and plans to continue withdrawing services after being targeted and penalized by the SEC.
Learn more about Nexo loans, and discover how Koinly calculates Nexo taxes fast.
Unchained Capital is a Bitcoin financial services company. Unchained Capital offers investors Bitcoin saving vaults and IRAs, as well as Bitcoin-backed loans.
Learn more about Unchained Capital.
YouHodler is appealing to investors looking for a quick crypto loan with a range of collateral options and a high LTV, offering ratios of up to 90% for up to a year.
Learn more about YouHodler, and discover how Koinly calculates YouHodler taxes fast.
CoinRabbit is a crypto lending platform with no KYC or credit checks, giving you liquidity fast when you need it and a lot of flexibility when choosing the right loan for you.
Learn more about CoinRabbit.
Uniswap flash swaps are similar to Aave flash loans in that they let investors exploit arbitrage opportunities in a given liquidity pool without needing capital to do so.
Learn more about Uniswap and discover how Koinly calculates Uniswap taxes fast.
Self-repaying loans might sound too good to be true, but thanks to some clever smart contracts, the developers at Alchemix have pulled it off.
Learn more about Alchemix.
SpectroCoin isn't just a crypto lending platform, it's a crypto exchange that offers crypto loans as an additional product, and it's ideal for investors looking for small loans in particular.
Learn more about SpectroCoin.
As the name suggests, Cake DeFi is a platform specializing in a huge variety of decentralized financial services, including crypto loans.
Learn more about Cake DeFi and discover how Koinly calculates Cake DeFi taxes fast.
Oasis.app started out as part of the Maker Foundation - the organization helping govern MakerDAO, Maker Protocol, and DAI. It's a trusted platform in the DeFi space and offers DAI loans.
Learn more about Oasis.app and discover how Koinly calculates Maker taxes fast.
Salt Lending is a Denver-based crypto lending platform that's particularly popular for investors in the US, Australia, and the UK.
A caution though - Salt Lending was caught up in the FTX contagion, as some digital assets were held on FTX. At the time of writing, Salt Lending has paused deposits and withdrawals. It sounds like bad news, but Salt is one of the few platforms impacted that looks like it will pull through - as the company has just closed a $64.4 million Series A funding round and plans to use the capital to recapitalize the balance sheet and resume operations.
Learn more about Salt Lending and discover how Koinly calculates Salt Lending taxes fast.
Crypto loans let you borrow crypto. There's two different types of crypto loans available - crypto loans with collateral and crypto loans without collateral.
There are many reasons an investor may take out a crypto loan. Hodling is a common strategy, but idle assets do little for crypto investors while they wait for the moon. A crypto loan can help increase your liquidity without depleting the assets you hold.
It depends on the type of loan you're taking out and whether you're getting a crypto loan with or without collateral. We'll cover both.
Crypto loans with collateral are the most common type of crypto loan. Like with cash loans, you'll deposit a given amount in order to take out a larger amount.
Let's say you hold 1 BTC. You're waiting for BTC to hit 100K to sell and you're confident it's going to get there eventually. But you need liquidity now and don't want to sell your BTC. You can use your 1 BTC as collateral to get a loan. Many large centralized crypto exchanges like Binance and Coinbase offer this service with a wide range of cryptocurrencies, loan terms, and interest rates.
With crypto loans with collateral - you'll often need to overcollateralize, meaning you'll need to lock up more crypto than the overall value of your loan. This is due to the volatility of cryptocurrencies and protects the lender from the value of the borrowed crypto falling below the value of the loan.
Once you've paid back your loan and the loan interest, your crypto is returned to you.
Crypto loans without collateral sprung up as a result of DeFi protocols. There are many unsecured DeFi lending protocols - but they all work in a fairly similar way in that they use smart contracts (code) to execute loan terms and conditions.
Collateralized DeFi loans exist - but due to the trustless nature of DeFi, they often require loans to be overcollateralized to protect lenders in the event of default. This reduces liquidity in the markets, and the DeFi space needs liquidity to function.
Not only this, but one of DeFi's main goals is to create permissionless, trustless access to finance. Many people taking out loans don't have the collateral in the first place. Crypto loans without collateral can give more people access to finance when they need it.
At the moment, this space is in its infancy. Primarily, you'll find flash loans being offered by major DeFi protocols like Aave, dYdX, and Uniswap. These flash loans (or flash swaps) allow investors to momentarily loan tokens or coins - most often ERC-20 Tokens or stablecoins - to make a given transaction.
Flash loans are both borrowed and returned within seconds in most instances and it's all executed by smart contracts that set the terms and conditions. If the borrower doesn't repay the capital or the conditions of the smart contract aren't met, the transaction is reversed and the funds return to the lender.
Investors have flocked to flash loans as they allow them to profit on arbitrage opportunities - where you buy on one market and sell on another. So when a token differs in price from one exchange to another, investors can use flash loans to make the most of these opportunities, even if it's a 1% difference, with a large enough flash loan, the gains are substantial. Aave in particular issues millions of dollars in flash loans daily.
There are, however, a small number of platforms now appearing offering crypto loans without collateral for specific lenders. For example, Atlendis offers crypto loans with no collateral for approved institutional traders.
A word of warning though - do your due diligence. This space is still new and as such, it's the ideal target for scammers. Remember - if it sounds too good to be true, it probably is.
Crypto loans come with a lot of perks, including:
Crypto loans increase your liquidity without depleting the assets you hold - giving you cash flow as and when you need it. This can allow you to make further investments, essentially putting your idle assets to work.
As well as this, one of the big benefits is that the majority of crypto loan providers aren’t interested in your credit score, unlike traditional banks. This is a huge problem for millions of people around the world who are denied access to finance through traditional financial systems. In some instances - like with Coinbase - you can borrow cash using your crypto as collateral, meaning your digital assets can provide you tangible, real-world value without selling.
Crypto loans also benefit from lower and more flexible interest rates, loan amounts, and loan terms than you’d get from traditional loan providers like a bank - letting you borrow more, for longer, and for less.
Perhaps the biggest benefit of all though is when it comes to your tax bill. In most countries, when you sell, trade, or spend crypto, you’ll pay Capital Gains Tax on any capital gain (profit) you make as a result. So if you’re looking to sell an asset or trade an asset to invest in another - you’ll likely have a tax bill. But crypto loans can give you access to more crypto (or cash) without triggering a taxable event because you haven’t disposed of your crypto.
However, this all depends on how your crypto lending platform works. If you're using a DeFi protocol and you receive tokens representing your capital, this could potentially be seen as a crypto-to-crypto trade and therefore may trigger a taxable event.
Like everything in crypto - crypto loans aren’t without their risks, including:
The unsteady price fluctuations of cryptocurrencies can lead to a margin call. This is where the borrower will need to put up more crypto in order to maintain their loan-to-value ratio, or else the loan will be liquidated.
When it comes to uncollateralized flash loans, as they're mostly executed by smart contracts you might think the risks are minimal. After all, the code sets the terms and conditions and the transaction is simply reversed if they're not met. But flash loans are new and so are the smart contracts running them. This has allowed cybercriminals to exploit vulnerabilities in so-called flash loan attacks.
Just this year, a flash loan was used to borrow huge sums on the PancakeSwap lending protocol to manipulate the price of the PancakeBunny's native token BUNNY in off-market lending pools, causing the price to crash by 95% and netting themselves around $3 million in the process.
Finally, many crypto lending platforms like Celsius, BlockFi, and Voyager abruptly halted operations last year as the bear market hit. Although there are a variety of reasons these lending companies halted operations - varying from exposure to FTX to the Terra Luna collapse - in some instances, customer funds were potentially mismanaged. You need to trust the platform you're taking your crypto loan out on as many investors got left with their collateral stuck on these platforms and are now facing lengthy bankruptcy proceedings in order to try and recover some of their losses. Though there's no clear rulebook on which crypto lending platform you can trust, a good mantra to remember is that if it sounds too good to be true - in terms of APR, or rewards - it probably is.
The precise steps to take out a crypto loan will vary depending on the crypto lending platform you're using, but in general, you'll follow these steps:
As we mentioned above, crypto loans offer some big perks when it comes to your tax bill - but that doesn’t mean you’ll get out of paying any tax entirely. We’ll start with the good news.
You won’t pay tax for taking out a crypto loan. It’s not considered income and you’re not disposing of your crypto by selling it, trading it, or spending it. So Income Tax and Capital Gains Tax don’t apply. You would however still need to check yes on the virtual currency question on IRS Form 1040.
This means you can use a crypto loan to increase your liquidity and avoid paying Capital Gains Tax on crypto. So if you’d like to invest in another asset - or if you need cash but don’t want the tax bill that comes with selling crypto - you can take out a crypto loan to swerve the tax bill.
Let’s take Coinbase loans as an example. You can use BTC as collateral to get a cash loan. This means you never dispose of your asset (by selling it, swapping it, or spending it) - but you still get cash. Spending your loaned cash is tax-free.
Your interest expense can in some instances be written off on your tax return - provided you’ve used your crypto loan proceeds for investment or business purposes. For example, using the loan proceeds to purchase other cryptocurrencies, stocks or securities. If this is what you used the loan for, you could deduct the interest expense on your tax return as an investment interest expense on Form 4952. However, if you’re using the crypto loan proceeds for personal expenses - like a car - this would not be tax deductible.
There are however a couple of instances you should know about where you may pay tax on your crypto loan. The first is if you fail to pay back your crypto loan - because then the platform will liquidate your collateral to cover their losses. Because your collateral would be sold - this would trigger a Capital Gains Tax event which you may need to pay tax on.
Similarly, if the price of your crypto collateral falls below the LTV threshold - this could also trigger liquidation. As above, the liquidation of your asset (sale) would trigger a Capital Gains Tax event and you may need to pay tax.
As well as this, some decentralized crypto lending platforms work a little differently from centralized crypto lending platforms. In some instances, when you deposit your collateral on a DeFi lending platform, you'll receive tokens in return representing your capital. This could potentially be viewed as a crypto-to-crypto swap by your tax office and therefore trigger a taxable event.
More questions? Here are some of the most common ones we get about crypto loans.
There's no cookie-cutter answer to this question, it will all depend on your individual circumstances as to whether a crypto loan is the right financial decision for you. You should always make sure you fully understand the risks involved in a crypto loan and your loan terms and conditions before agreeing to any crypto loan.
Yes. Platforms like Aave offer crypto loans without collateral - also known as flash loans. As well as this, companies like Atlendis are beginning to offer crypto loans without collateral for specific investors, based on their reputation.
Generally speaking, crypto loans from trusted crypto lending providers are safe. However, you should always do your research and carefully read your loan agreement and make sure you understand the risks involved before taking out any crypto loan.
This depends on the crypto loan platform you're using and how much collateral you're putting up. Some crypto lending platforms will let you loan up to $1 million!
Your position will liquidate and you'll lose your collateral if you don't repay a crypto loan. Many crypto lending providers automatically liquidate collateral if your LTV ratio falls below an agreed amount due to price volatility as well.
Like all financial investments, crypto loans aren't without risk, including price volatility, margin calls, liquidation, and even crypto lending platforms halting withdrawals and deposits. You should carefully consider these risks before taking out a crypto loan.
This depends on the crypto loan you've taken out. If you've taken out a cash loan, you'll generally pay this back in cash in monthly installments. Meanwhile, if you've loaned another cryptocurrency like BTC, you'll generally pay this back in BTC in monthly installments. Some DeFi lending platforms don't require monthly installments and some even offer self-repaying loans.
Yes. Binance offers crypto loans with no penalties for early repayments. You can find out more about loan options, periods, and interest rates on Binance.
There are a number of crypto lending platforms that offer cash loans with crypto collateral. All you need to do is pick one, choose the fiat currency you want to receive your loan in, and add payment details for how and where you'd like to receive your loan.
Koinly crypto tax calculator simplifies your crypto taxes. No more guessing your gains, losses or income - Koinly does it all for you.
All you need to do is sync all the wallets and exchanges you use with Koinly. You can do this using API integration in minutes or by importing CSV files of your transaction history. Once you’ve done this, Koinly calculates all your taxable transactions, including capital gains, losses, income and expenses. You’ll find all this information and more in an easy to read tax summary.
You can then download pre-filled tax reports based on your location, saving you hours of filling out forms. For example, for US investors Koinly can generate your Form 8949 and Schedule D for you, as well as TurboTax and TaxAct reports.
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