Cryptocurrency loans have become the perfect alternative to traditional lending, with the COVID-19 pandemic being the turning point. Confinement popularized P2P loans with low commission, although their rise in recent years responds to the crypto lending services from centralized exchanges (CEX).
Platforms that offer crypto loans with low commission
Bit2Me
The place to invest in crypto
Access the official Bit2Me page
Cryptocurrencies available +240
Offer limited to new customers 15 EUR in Bitcoin
YouHodler
Better rewards for your users
on the official YouHodler website Availability Europe and the United Kingdom
Deposit fee No fee
Cryptocurrencies 20
OK
Promotions for new users
access the official OKX website
Minimum volume 1 EUR
Commissions 0.080 – 0.1%
Cryptocurrencies +350
Our methodology to choose the best platforms that offer crypto loans with low fees
Accessibility to cryptoasset loans continues to increase with the launch of new lending services by centralized exchanges. We have analyzed the following platforms for more than six months, taking into account elements such as the quality of customer service and crypto products:
- Bit2Me It is one of the most regulated CEXs in the eurozone. It is perfect for applying for crypto loans in Europe, as it complies with the guidelines of the European regulatory framework for digital assets (MiCA). Its lending service (Bit2Me Loan) allows you to request loans of up to one million euros.
- YouHodler is a Swiss platform specialized in cryptocurrency loans with dozens of assets. Its lending service stands out in the market for applying an LTV of up to 90%.
- OK It is one of the largest CEXs in the world, competing with giants like Binance in terms of trading volume and liquidity. Its crypto lending service features more than 150 digital assets, including Bitcoin, popular altcoins, and high-cap stablecoins.
What are cryptocurrency loans?
Crypto loans are similar to traditional loans. For borrowers, they represent a source of liquidity; For lenders, a way to make their funds profitable. The main difference is that the crypto loans are backed by digital assetstaking the place of fiat money in traditional lending.
This way, you can offer your cryptocurrencies as collateral to request a loan without having to sell them. Likewise, the counterparty does not have to liquidate its tokens to lend money. Lender and borrower take advantage of the real value of their digital assetsassuming both the advantages and risks associated with the crypto market.
Crypto Lending: Loans with low commission?
One of the claims of the platforms that offer crypto lending services is the low cost of loans. Certainly, the interests for lenders are more attractive and the commissions for borrowers are lower. Of course, there are cases where it is cheaper to take out a traditional loan, but, in general, The conditions are much more attractive in the OC.
In relation to the cost of crypto loans, it should be noted that the absence of previous exams to grant them is a point in favor. Many borrowers prefer to pay higher fees on decentralized platforms (DEX) as they can directly and instantly access loans.
What to keep in mind when applying for cryptocurrency loans?
Some of the points to keep in mind before requesting a crypto loan on a CEX have to do with risk management. It is prudent to remember that although the cost is much lower compared to traditional loans, There are dangers associated with variables such as volatility.
When choosing a platform to request or grant cryptocurrency loans, it is advisable to evaluate factors such as the degree of collateralizationthe application of LTVthe percentage APY/APR and the return period of the loan.
Top 4 platforms that offer crypto services in 2024
Bit2Me
Why do we recommend it?
Bit2Me Loan allows you to request flexible loans worth up to one million euros using the digital assets available in the platform account as collateral. With an LTV of 50% and a return period of up to 180 days, the Spanish CEX offers a competitive crypto lending service, standing out for the absence of credit verifications and opening commission.
Why do we recommend it?
YouHodler’s crypto lending service offers three types of loans based on the term (from 30 to 120 days), interest (ranging between 7% and 13%) and LTV (up to 90%). Loan payment can be made through various means: card, transfer, stablecoin and wallet.
LTV
65% down (flexible loan)
APY/APR
Flexible and fixed
Term
Up to 90 days (C2C loans)
Why do we recommend it?
OKX offers flexible loans with immediate approval with a 1% APR, allowing flexible repayment and the use of multiple collateral. The interest on the loans depends on the asset, highlighting that of the most popular stablecoins: 10% for loans with USDT and 40% for lending with USDC.
APY/APR
Flexible and stable
Why do we recommend it?
Binance offers crypto loans with an initial LTV of 65% and margin call at 75%. Terms vary from one week to six months, applying interest that is calculated periodically, applying flexible and fixed hourly interest depending on the asset. In the case of Bitcoin, the base hourly interest is 0.8% for flexible loans and 3.21% for stable loans of 30 days duration (rates as of February 13, 2024).
Advantages and risks of crypto loans
Loans with low fees in the crypto market are not without dangers. This advantage is balanced by the risk associated with the volatility of cryptocurrencies, although this aspect is usually solved with Overcollateralization and LTV (obligation to maintain the relationship between loan and value).
They are mechanisms that fundamentally protect lenders. In fact, LTV can have a dire impact on borrowers if the assets involved in the loan plummet. From this point of view, Crypto lending is much kinder to users who lend their capitaldemocratizing access to this type of markets, historically relegated to financial entities.
Loans with low fees: Suitable for everyone?
Arguably, the advantages of cryptocurrency loans are limited to accessibility and low fees. At first, it would be enough to motivate a massive adoption of this type of loans, but the truth is that associated risks in technological and commercial terms They largely limit the entry of the bulk of retailers.
Crypto loans are not suitable for all types of profiles. Asset volatility and irresponsible use of DEXs that offer unsecured loans can lead to serious losses to inexperienced users without a timely risk management strategy. In this case, CEXs represent a plausible alternative to enjoy the advantages of crypto lending.
Frequent questions
Crypto loans involve the use of cryptoassets as collateral. They have similarities with traditional loans, but are usually cheaper and more accessible.
CEXs such as Bit2Me, YouHodler and OKX offer crypto lending services. To request a loan on these platforms, simply open an account, pass the KYC and, depending on each platform, comply with the conditions of service.
Crypto loans are usually cheaper for borrowers as they enjoy lower fees. For lenders, they offer greater performance and security.
Disclaimer
Disclaimer: In accordance with Trust Project guidelines, the educational content on this website is provided in good faith and for general information purposes only. BeInCrypto prioritizes providing high-quality information, taking the time to research and create informative content for readers. While partners may reward the company with commissions for article placements, these commissions do not influence the process of creating unbiased, honest, and useful content. Any action taken by the reader based on this information is strictly at his or her own risk.
2024-02-14 03:59:55
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