What is a crypto loan?

A crypto loan is a type of secured loan, similar to an auto or student loan, in which you commit to an asset as collateral in order to secure financing. In this case, cryptocurrency is the asset offered to a lender in exchange for cash.These crypto-backed loans are secured loans that use digital assets, like Bitcoin, as collateral.

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 cryptocurrencies can be used as collateral for a loan?

BlockFi, Salt Lending, Celsius Network, and are some of the best-known and most widely used lending platforms in the space. You can find out more about each of these lending platforms in our reviews. As a rule, you can count on being able to use Bitcoin, Ethereum, and Litecoin as crypto collateral for a loan.

Do crypto loans require a credit check?

Unlike traditional bank loans, you won’t have to undergo a credit check for approval. This is one of the main benefits of crypto loans for many consumers, especially those with less-than-perfect credit. Cryptocurrency loans are operating on the cutting edge of decentralized finance.