What is a crypto loan?

A crypto loan is a type of secured loan in which your crypto holdings are used as collateral in exchange for liquidity from a lender that you’ll pay back in installments. As long as you make your payments and pay the loan amount in full, you get your crypto back at the end of the loan term.

Can a crypto loan be used as collateral?

Similar to assets like stocks, houses and cars, your cryptocurrency can serve as collateral for a loan. And like other secured loans, crypto loans are repaid with interest over a set term. The benefits of crypto loans are short-term access to cash, low interest rates, quick funding and no credit checks. The downside?

Are crypto loans risky?

Crypto loans offer access to cash or crypto via collateralized loans. Crypto loans are inherently risky because margin calls may happen if asset prices drop. Crypto lending platforms act as an intermediary for lenders and borrowers, and both centralized and decentralized markets are available.

What are the different types of crypto lending platforms?

There are two main types of crypto lending platforms: decentralized crypto lenders and centralized crypto lenders. Both offer access to high interest rates, sometimes up to 20% annual percentage yield (APY), and both typically require borrowers to deposit collateral to access a crypto loan.