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If you have been following the current trends in the financial sphere, you have probably heard about bitcoin lending, or rather crypto lending.

This is a trend that has opened up lucrative opportunities for crypto players – big and small. Crypto lending is an alternative investment form where investors lend cryptocurrencies or fiat money to borrowers in exchange for interest payments.

What Is Bitcoin Lending?

You have probably heard people or institutions taking loans. Often, these loans are giving by banks and other financial institutions and must be repaid with some interest.

This is how lenders make money. Crypto loans work in the same way, only that anyone can make money through interests in this form of lending. Bitcoin lending allows anyone to lend crypto through various platforms and earn interest.

At the core of bitcoin lending is a simple concept: borrowers can use crypto assets as collateral to obtain loans in fiat currency, while lenders provide what is required for the loan at an agreed-upon interest rate.

This also works in the reverse where borrowers can use stablecoins or fiat currency as collateral to borrow crypto assets. Crypto loans are basically collateralized loans. Over the past few years, bitcoin lending has opened up a myriad of benefits and applications for traders, businesses, institutions, and other users across the globe.

It has increased the amount of productive work financial assets by reallocating it from the people without an immediate use case to those with one; hence increasing the utility of those assets for all parties.

What Is Bitcoin Lending

The Use Of Smart Contracts In Crypto Lending

Smart contracts are lines of code stored on a blockchain that automatically execute when certain predetermined terms and conditions are met. They are often used to enforce some form of agreement so that participants can be certain of the outcome without the involvement of an intermediary. Blockchains that support the functionality of smart contracts are referred to as blockchain 2.0.

In BTC lending, smart contracts streamline the complexity that comes with the traditional lending process that involves several intermediaries because of lack of trust among participants in a transaction.  Since the identity of the borrower is stored in the blockchain, lenders can quickly make a decision about credit.

Every crypto lending must have a well-designed smart contract that contains the initial loan amount, and the repayment terms including penalties if payments are late or defaulted. For instance, if you take a loan of $1,000 with a repayment period of 12 months at $500, the smart contract should execute the payment requests, receive all payments, and adjust the amount due without the involvement of an intermediary.

Smart contracts also make it possible for parties to embed automatic compensation functions such as adjusting credit limits, converting to a higher yield currency, or deducting percentages for every loan payment.

Smart contracts come with a wide range of benefits, including:

  • Speed and accuracy: Since smart contracts are automated, borrowers don’t have to spend time processing paperwork or correcting and reconciling errors that are often made in documents filled manually. Since they are based on code, smart contracts are also more accurate than the legalese that convectional contracts are written on.
  • Security: All blockchain transaction records are encrypted, and they are nearly impossible to hack. Since each individual record is connected to the subsequent and previous ones on a distributed ledger, the entire chain would need to be altered to change one record.
  • Trust: In crypto lending, smart contracts automatically execute all transactions following pre-determined rules, and the encrypted records of every transaction is shared among all participants. Lenders and borrowers can, therefore, trust each other as long as they are working with a reputable bitcoin lending platform.
Smart Contracts in Crypto Lending

Blockchain Types & Their Usability In Crypto Lending

A blockchain is a distributed database that is shared in a peer-to-peer network. It contains a linked sequence of blocks that hold timestamped transactions which are secured by public key cryptography and verified by the network’s community.

Even though there are no two definitions of blockchain, all blockchains are not the same. Some of the most common types include:

Permissioned/Closed Blockchains

In this type of blockchain, all nodes can read and submit transactions. However, only authorized nodes can validate transactions. Examples of permissioned blockchains include Stellar and Ripple.

Permissionless/Open Blockchains

In permissionless blockchains, all nodes can read, submit, and validate transactions.

While these types of blockchains share common characteristics such as timestamped transactions, cryptography, and a distributed network, they are different in terms of user’s ability to read and submit transactions to the blockchain.

This ability is based on their access to transactions and holds critical implications for how peer-to-peer platforms can use blockchain in P2P lending.

Blockchain Types

12 Best Bitcoin & Crypto Lending Platforms In 2021

Today, there are hundreds of peer-to-peer crypto lending platforms that are disrupting traditional debt providers. They are providing investors with amazing opportunities to achieve stable and lucrative passive income while providing a convenient way for borrowers to meet their financing needs.

Bitcoin lending is now used by thousands of investors across the world to diversify their investment portfolios.

Even though there are hundreds or even thousands of great bitcoin and crypto lending platforms, we have researched and outlined 15 of the best. We will outline how each platform is using the blockchain technology and offer a brief guide on how to get started on each of them. Read on!

1. CoinLoan

Founded in 2017 by Max Sapelov and Alex Faliushin in a bid to help investors who believe in HODling to sell their crypto assets and obtain cash, CoinLoan is one of the best crypto lending platforms. It was born as a platform for crypto-secured loans and in March 2020, it began offering fiat-to-crypto loans with the possibility of using both stablecoins and fiat as collateral.

The lending process in CoinLoan works similarly to a bank. Part of your deposit is used to create loan offers in the form of crypto-backed lending. The entry barrier in this platform is relatively low, with a minimum deposit of $100.

2. BlockFi

BlockFi was developed in 2017. Its main goal was to enable crypto holders to do more with their currency. What makes BlockFi stand out from other cryptocurrency lending platforms is that its financing did not come from Initial Coin Offering (ICO) but from institutional investors.

This platform provides crypto-backed loans to holders of Ether, BTC, and Litecoin. It allows them to access liquidity in USD without having to sell their assets. This is a great option or investors who want fiat currency but still want to maintain ownership of their crypto.

3. Nexo

Nexo has gained popularity as the first instant crypto backed loans platform in the world. On Nexo, borrowers can access loans from $1,000-$2,000,000.

So far, this platform has offered $2 billion worth instant bitcoin loans – and this makes it one of most renowned bitcoin lending sites on our list. Currently, it has some of the lowest interest rates available starting from 5.9% APR.


SALT is a blockchain-backed loan platform that welcomes all crypto traders to lend and borrow. One of the things that stands out on this platform is that once you borrow, your funds are deposited directly into your bank account.

So far, the platform has offered over $50 million in crypto loans. The only notable drawback about this platform is that it is not available worldwide, since its services can only be accessed from 30 jurisdictions.

5. YouHodler

YouHodler has undoubtedly one of the best crypto lending programs on the market. It has a high loan-to-value ratio that goes as high as 90%. It is compatible with most digital currencies, and this makes it a comfortable choice for most, if not all crypto investors. Additionally, this platform accepts all major cards, including American Express, Maestro, MasterCard, Visa, and more.

It also works with top payment gateways including PayPal, Skrill, Apple Pay, Qiwi, and more. When borrowing, you don’t need any credit checks. It has a simple interface that makes it possible for everyone, including newbies to interact with the platform.

6. Xcoins

Started in 2018 by Sergey Nikitin, Xcoins has grown to become one of the greatest bitcoin lending platforms of all time. This site leverages PayPal to make its operation simple and efficient. It allows people to borrow, and in return, lenders get monthly payments via PayPal at varied interest rates. On this platform, lenders set the interest rates, and borrowers choose to take them or not.

7. Binance

Known as the best crypto exchange on the market, Binance is now one of the greatest P2P crypto lending sites. Launched in March 2020, Binance crypto lending allows its customers to use their crypto assets to secure loans.

Currently, it allows users to get paid out on two Stablecoins: USDT and BUSD. This platform supports a wide range of varying loan periods and interest is calculated on a daily basis. Several coins can be used as collateral, including ETH and BTC.

8. is a centralized lending platform registered in Hong Kong. It was created by experts with a unique blend of financial knowledge, global market intelligence, as well as blockchain-based project experience.

This platform has a lot to offer, including a robust collateral process and extensive security measures. It is incredibly client-focused, and features an intuitive, simple, and friendly interface.

9. Hodlnaut

Hodlnaut stands out in this list since it is the go-to place for corporate loans. Its loan limit starts at $50,000 and can have fixed or flexible loan terms for a shorter period. This platform offers flexible loan-to-value rate ranging from 25%-100%. Corporate clients can choose to be paid out in USDT, USDC, or BTC. While this platform is great for corporate clients, it is more rigorous that typical lending platforms outlined in this article.

10. Kiva

Kiva is a nonprofit organization based in San Francisco. Its main mission is to connect people and businesses through lending for economic empowerment.

Today, it has more than one million active lenders, making it one of the best P2P crypto lending platform.

This site provides loans primarily through optional donations, support from sponsors, and voluntary lenders.

In 2019, Kiva launched Africa’s first decentralized national ID system in Sierra Leone.

11. Nebeus

Nebeus is a ‘crypto bank’ that allows crypto holders to use their assets in peer-to-peer lending. People with crypto assets are allowed to use their crypto portfolio as collateral when they need loans at reasonable rates.

Crypto loans are provided in three fiat currencies including GBP, EUR, and USD. This platform has a simple and intuitive interface that makes friendly for newbie users.

12. SpectroCoin

SpectroCoin is a trusted crypto exchange that has provided crypto loans to millions of customers over the years. It allows users to use their crypto holdings as collateral to back their crypto loans. This platform supports ER, ETH, BTC, and other currencies.

The LTV ratios range from 25%-75% which is quite impressive. Choosing a crypto loan with a higher LTV is risky, but it allows you to get the biggest available loan with your crypto collateral.


How Do I Make Passive Income With Bitcoin Lending?

Lending is one of the best ways of earning passive income with crypto assets. There are many P2P crypto lending platforms which allow you to lock up your funds for a particular amount of time and collect interest payments later. The interest rate can be fixed (set by the bitcoin lending platform) or set by you as the lender based on the current market rate.

Boomtime for Crypto Lending

Is Crypto Lending Safe?

Even though crypto lending can be lucrative, we cannot shun away from the fact that it carries some risks. It is not something that you should go into blindly. Some of the people who are attracted to this form of lending have a bad credit history and are often deemed to default.

However, some lending platforms allow lenders to keep up to 80% of the crypto collateral in case of a default. Also, there are security risks that come with crypto lending. If you want to become a lender, it is prudent to move your assets from bitcoin lending platforms and store them in secure online wallets such as Tezro, or better still, store them in your hardware wallet.

What Are The Advantages Of Crypto Lending?

Crypto lending comes with a plethora of benefits, including:

  • Crypto lending is more accessible and not subject to your credit score.
  • Crypto lending is faster. You don’t need to undergo a rigorous application process as it is the case in the traditional financial system.
  • Crypto lending has more flexible payment terms. Borrowers have an opportunity to customize long they want their loan to be for, the stablecoins or fiat currency they want to be paid out in, and loan-to-value-ratio.
  • Crypto loans have lower fees than traditional loans.
Advantages of Crypto Lending

Get the Tezro App

TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

What Are The Risk Levels Of Crypto Lending Compared To Traditional Lending?

Most people often consider getting loans from traditional banks because they believe they are safer. Nonetheless, most banks around the world have been involved with nearly all major money laundering scandals in one way or another.

Banks are run by humans who are naturally fallible. They also don’t have the best security measures especially in terms of technology. On the other hand, crypto lending platforms are risky since they are digital. However, modern bitcoin lending platforms are more secure than traditional banks.

The crypto industry has been actively working to be more reliable and reputable, especially in terms of security.

Crypto lending platforms clearly outline their security measures on their websites. As long as you do your part and use secure wallets like Tezro or cold wallets, all the platforms outlined in this article have lower risk levels than traditional banks.


In the short term, we can confidently state that crypto lending has provided a myriad of unique opportunities for crypto participants to gain liquidity, earn yield, and boost the productivity of their assets.

As this ecosystem continue to grow, experts project that it will remain a pivotal piece in shaping the future of cryptocurrency – and will impact its adoption as a mainstream currency.

To keep your crypto assets in good hands, don’t forget to download the Tezro app. With Tezro you can have your chat and your bank in the same app.

Blockchain Lending
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