Cryptos are highly volatile, and holding is often encouraged until the price appreciates. Crypto lending is a growing sector in the crypto industry that helps investors earn interest on their crypto assets without selling them. Several great crypto lending platforms are working out there.
If you are confused about which crypto lending platform to choose, then this article is for you. Here, you will learn about the best crypto lending platforms in 2021.
What is a crypto lending platform?
Crypto lending platform is an online platform that facilitates users to lend their cryptocurrencies to borrowers in exchange for dividends or interest.
Types of lending platforms
The following are two types of crypto lending platforms.
- Automated lending platforms: Such platforms start providing dividends as soon as an investor deposits his assets in his wallet.
- Manual lending platforms: Investors manually stake a certain amount of crypto to start earning dividends through manual lending platforms.
Things to consider in a crypto lending platform
Every platform has its unique features. It would help if you considered the following factors when choosing a crypto lending platform.
- Compare the interest rate on the crypto you want to lend.
- Check out if the lending duration is fixed or not.
- Is there any minimum deposit limit you must have?
- How much collateral is required compared to the loan amount?
- What are the risks associated with the platform?
Best crypto lending platforms in 2021
The following are the best crypto lending platforms in terms of features and returns.
Celsius is a UK-based lending platform that offers the highest stable coins interest rate, up to 17%. On cryptocurrency, APR is up to 6.35%. A borrower can choose to get the loan amount in a variety of cryptocurrencies, i-e 41 coins. There is not any limit to the maximum loan, but the minimum loan must be $500. The user must put a proportional amount of collateral to receive the loan.
YouHodler is a Swiss lending platform and is not available for US citizens. It offers interest up to 7% on cryptos and 12.7% on stable coins. It provides to get a loan in 25 different cryptocurrencies. There is not any fixed lending duration.
Coinloan is a type of manual lending platform that requires a minimum investment of almost $115. It is based in Estonia. Lenders can earn up to 10% yearly returns. The lending duration is up to 3 years. It is available for US citizens. Users can get a loan in 18 different cryptocurrencies. The maximum APR on stable coins is 12.3%, while on cryptocurrencies, it is 7.2%.
BlockFi is a New York-based excellent platform to earn interest by lending cryptocurrency. It offers an APY of 3% to 6% on cryptocurrency, and for stable coins, the interest rate is up to 9% annually. It also provides a facility of USD loans. You must put up 4.5% to 9.75% of cryptos as collateral to lend money. The amount of loan depends on collateral; there is not any maximum loan amount.
Crypto.com is a Hong Kong-based crypto lending platform. It is available for US citizens. Users need to deposit $250 to start. The lending duration time is up to 90 days. Users can choose to get a loan in 35 cryptocurrencies. The maximum APR on cryptocurrencies is 6.5%, and on stable coins, it is 12%.
Binance, headquartered in Seychelles, offers crypto lending services available for US citizens as well. It requires an investment of only $1 to start. The lending duration is similar to Crypto.com, up to 90 days. The number of coins available to choose for lending is 58. The maximum APR in stable coins is 7%, and for cryptocurrencies, it varies.
Is it safe to choose crypto lending?
Crypto lending is an efficient method to earn passive income on cryptocurrencies. It promises high returns. There are some risks as well. The most considerable risk associated with crypto lending is a decrease in the asset’s value in which you get the loan. You must be aware of market trends before choosing crypto for lending. Crypto lending also involves using smart contracts, which come with the risk of bugs or hacks.
However, if you choose to work with a reputable platform, you are safe.
Cryptocurrency adoption is increasing massively, with clear evidence that crypto is going to stay long. Crypto loans are considered unique due to their features as compared to traditional loans. Choosing a lending platform carefully can help you a lot to earn a good amount of gains while keeping you secure as well.
No matter in which crypto sector you are, there will be risks. Therefore, you must understand things properly and do homework before making any decision.