A loan industry is growing around Bitcoin. Bitcoin can be considered the best collateral ever, it is an extremely liquid, global market, and whoever holds the keys controls the Bitcoin. If you have Bitcoin, it is relatively easy to put it down as collateral. No need to have good credit score or to be creditworthy. Using Bitcoin helps you build your reputation. Lenders create their reputation independently. The other side of the coin is that it is extremely hard to borrow cryptocurrency without collateral. Most, if not all, crypto loans without collateral are scams.
Bitcoin loans without verification: While some bitcoin backed loans platforms do require verification, other don’t. For example, Guarda offers crypto backed loans without KYC requirements. Fortunately, you also don’t need a minimum credit score, a credit check, or a minimum income to apply for a crypto-backed loan. Furthermore, you get the loan faster than other options such as banks.
How to Get Bitcoin Loan Without Collateral
Traditionally, loans require collateral, something of value to secure the loan in case of default. But the world of cryptocurrency has come up with a concept called flash loans. Flash loans are a Decentralized Finance (DeFi) innovation that allows you to borrow cryptocurrency instantly without putting up any collateral or deposit. The catch? The entire loan process, including borrowing, executing your trade, and repaying the loan with interest, must happen within a single transaction on the blockchain. This is enforced by smart contracts, self-executing code that automates the loan process.
Read also: How to borrow USDT loans without collateral
How Do Flash Loans Work for Bitcoin Borrowing?
Imagine you see a chance to buy Bitcoin on one exchange at a lower price and sell it on another exchange for a higher price. A flash loan allows you to borrow enough Bitcoin instantly to exploit this price difference. You would:
- Initiate a flash loan request for the desired amount of Bitcoin.
- The smart contract releases the Bitcoin.
- You execute the arbitrage trade, buying low and selling high.
- With the profit from the trade, you repay the original loan amount plus interest within the same transaction.
If the trade fails or isn’t completed within the timeframe, the smart contract automatically reverses the entire transaction, ensuring the lender regains their Bitcoin.
Flash loans are attractive but they require sophisticated users with a deep understanding of DeFi and smart contracts who can exploit market inefficiencies or arbitrage opportunities. A single mistake can lead to significant financial loss.
There is also a new concept called Decentralized credit protocols (DCPs). DCPs are exploring ways to assess creditworthiness without relying on crypto collateral. These platforms might consider your real-world credit history or other factors to determine your eligibility and interest rate. However, DCPs are still in early development and may not be widely available.
Platforms for Crypto Loans No Collateral
Some popular DeFi platforms that offer instant crypto loans without collateral (flash loans), include the following:
- Aave: A leading DeFi lending platform known for its user-friendly interface and support for various crypto assets, including flash loans.
- dYdX: A decentralized exchange that also offers margin trading and flash loans.
- Uniswap: Primarily known for cryptocurrency swapping, Uniswap also has functionalities for flash loans (called Flash Swaps on their platform).
- Equalizer Finance: This is a DeFi marketplace that specializes exclusively in flash loans.
How to Get Instant Bitcoin Loan
Flash loans represent a significantly elevated risk for lenders and entail considerable complexity for borrowers. Moreover, they typically carry notably high interest rates. Given the decentralized nature of DeFi platforms, there exists a proliferation of scams within this space. If you are holding Bitcoin, opting to use them as collateral might be a less complex and safer alternative to access to instant crypto-backed loans as opposed to uncollateralized crypto loans.
Let’s look at platforms offering instant crypto backed loans. To get a crypto loan with these platforms, you need to give cryptocurrency such as Bitcoin as collateral since there are no credit checks as it is the case with bank loans. Your creditworthiness is not based on your credit score. This means many people who can’t access loans from traditional financial institutions can borrow Bitcoin instantly.
In case you do not want to negotiate, you can get an instant peer to peer Bitcoin loan with BTCPOP. These loans are usually private, and you can do anything you want with it, unlike standard loans where you have to declare why you need a loan. Moreover, they are not based on credit score but reputation.
Best Bitcoin Loan Sites
Getline, Celcius Network, and BlockFi used to be a bitcoin lending companies. Getline is not operational anymore, BlockFi filed for bankruptcy in November 2022, and Celcius Network filed for bankruptcy in July 2022.
Nebeus Crypto Loans
Nebeus is a UK/Spain-based firm that deals with bitcoin loans online. It also provides other crypto services such as trading, crypto renting, crypto insurance and remittances. Cryptocurrency holders can get instant cash loan of up to 80% of their Bitcoin value under Flexible Loan plan. Your crypto portfolio is the collateral for a fiat-money loan. For a loan of $1000, you need 0.045818 Bitcoin as collateral. If your repayment period is 6 months, you will pay a total of $1,026 from a monthly payment of $171. There are also no fees for early repayment if the loans are paid back after 30 days.
The minimum loan one can borrow is 0.005 Bitcoin, while the maximum depends on the borrower’s reputation. Nebeus does not have an approval process, so it immediately issues a loan. You can transfer a loan to any credit or debit card in minutes in EUR, USD, or GBP. Here’s a list of Nebeus crypto loans supported countries.
Nebeus has two types of Loans: Quick Loans and Flexible Loans.
Nebeus Quick Loans
- Interest rate: 0%
- Cash: from 50 to €500
- Term: 3 months
- Loan Origination Fee: 2.5%
- Free early repayment option
Nebeus Flexible Loans
- Interest rate: from 6% to 13.5%
- LTV: from 50% to 80% of your Crypto value
- Term: up to 3 years
- Loan Origination Fee: 0%
- Loan Limit: 250,000 Euros
- Early payment (before 30 days) fee 2.5%
Read: Nebeus Crypto Review
YouHodler Loans
YouHodler is a regulated crypto-backed lending platform operating in the EU and Switzerland. Unlike peer-to-peer (P2P) platforms, there’s no need to find a lender on YouHodler. The platform offers instant cash loans in major fiat currencies (EUR, USD, CHF, GBP) and stablecoins, using your cryptocurrency as collateral.
YouHodler offers a variety of loan options, including instant loans for up to 30 days at 12% APR, term loans with repayment periods of 3 to 12 months at 10% APR, and turbo loans for quick access to funds for up to 7 days at 15% APR. Withdrawals can be made via SEPA, SWIFT, or debit card, providing convenient access to the borrowed funds.
Nexo Crypto Loans
Nexo a crypto exchange and an instant crypto lending platform that was established in 2017. The platform works whereby you deposit crypto assets into their wallet and in return gets an instant crypto line of credit. For example, if you borrow $1000, you need 0.0479 Bitcoin as collateral. You can spend the money using Nexo debit card, or you can withdraw it to your bank account. Nexo loan service has over 40 fiat-money currency, and it is operating in more than 200 countries.
Nexo was first to introduce instant crypto lending as one of the earliest crypto lending platforms. You can use crypto and stablecoins as collateral. Once the loan-to-value ratio has been determined, you receive money in the form of stablecoin or fiat. You can get a 50% discount on the interest loan if you repay the loan in Nexo tokens. Interest for the loans starts at 5.9% APR. You can borrow from $50 to $2 million.
SALT Crypto Lending
SALT Lending was founded in 2016 in the US. It offers both individual crypto backed loans and BTC business loans. Once your cryptocurrency loan is approved, you get cash or stablecoin directly to your bank account without additional costs. It is now available in over 46 US states, Canada, United Kingdom, Switzerland, UAE, Hong Kong, Vietnam, Brazil, Australia, and New Zealand.
If you do not have money and you need it, you do not have to sell your cryptocurrencies. SALT Lending allows you to use them as security to get a loan. Therefore, with SALT Lending it is possible to get a cash loan from $5,000 for 3 to 12 months and secure it using cryptocurrency. Maximum loan amount depends on the jurisdiction and other restrictions. You do not need to have a good credit score to qualify for an instant crypto loan since the platform considers one’s reputation. You have an option to repay the loan in monthly installments.
Furthermore, the SALT credit card is the first crypto card that lets you HODL crypto and spend cash. You also earn crypto rewards every time you swipe your SALT Card for your everyday purchases.
Guarda Crypto Loans
Guarda offers crypto loans, which you can use to borrow fiat currency or stablecoins.With this platform, it’s possible to get anonymous bitcoin loan with no account registration, KYC or credit check. The amount of loan you can borrow will depend on the value of your collateral and the loan-to-value ratio (LTV) set by Guarda. For example, if you have 1 BTC worth $30,000 and the LTV is 50%, you can borrow USDT loan up to $15,000.
The interest rate on Guarda crypto loans is between 12% and 17% APR. There are no fees for getting a loan, but there is a fee for repaying the loan early. The fee is calculated as a percentage of the loan amount and the number of days early you repay the loan.
CoinRabbit Loan
CoinRabbit is one of the newest bitcoin loan lender. The company offers you fiat or stablecoin loans and take your cryptocurrency as collateral. The annual percentage rate (APR) for CoinRabbit bitcoin loans varies depending on the chosen currencies and falls within the range of 12% to 17%. The interest on the crypto loan is calculated on a monthly basis, starting from the time the loan was taken, and is included in the total repayment amount.
Regardless of the current market price, the repayment amount for the CoinRabbit crypto loan remains unaffected by the collateral currency rate. When repaying the loan, you will receive the same amount of cryptocurrency that you initially deposited as collateral. For example, if you provided 1 BTC as collateral, you will receive back 1 BTC upon loan repayment, regardless of any changes in its market value.
Binance Crypto Loans
Binance is one of the largest cryptocurrency exchange platform in the world. The platform supports crypto lending for its customers’ crypto deposits. You can use crypto as collateral to get crypto loan or fiat money loan. Supported cryptos include BTC, USDT, BUSB, BCH, XRP, and DASH while EUR and GBP are supported fiat currencies.
The duration of the loan varies. Binance has loan terms of 7, 14, 30, and 90 days. If you want 1000 EUR loan, you need 0.05363077 Bitcoin as collateral. If your loan period is 90 days, you will pay back 1023.4 EUR. You can always repay in advance and the interest is calculated based on the days borrowed. It takes two weeks for the loan to mature. Also, the annual interest rate varies from 10, 15 and 7 percent for Tether, Binance Coin and Ethereum Classic respectively.
Unchained Capital Loans
Unchained Capital is a company that provides bitcoin-backed loans without the need for credit checks or KYC verification. It offers personal instant crypto loans without collateral in the USA and commercial crypto backed loans in the US and some countries around the world. With Unchained Capital, you can borrow fiat currency or other cryptocurrencies by using your bitcoin as collateral. The loan amount available to you depends on the value of your collateral and the loan-to-value ratio (LTV) set by Unchained Capital. For instance, if you have 1 BTC valued at $30,000 and the LTV is 50%, you can borrow up to $15,000 in USD.
The interest rates for Unchained Capital loans range from 6% to 12% APR. While there are no fees for obtaining a loan, early repayment incurs a fee calculated based on a percentage of the loan amount and the number of days repaid ahead of schedule.
Read: Unchained Capital Review
P2P Crypto Lending
P2P crypto lending enables individuals to lend and borrow cryptocurrencies directly, bypassing traditional financial institutions. Borrowers provide collateral, such as crypto or fiat currency, to secure the loan, and lenders transfer the cryptocurrency to the borrower. The borrower repays the loan with interest to the lender. While there may be a demand for P2P crypto lending without collateral, it’s important to note that P2P bitcoin lending platforms do require the use of cryptocurrency as collateral.
Why P2P Bitcoin Loans Over Banks?
There are several reasons why individuals may prefer P2P crypto loans over bank loans. Here are some common advantages:
- Lower interest rates: P2P Bitcoin loans often offer lower interest rates compared to bank loans.
- Quicker approval process: P2P Bitcoin loans typically have a faster approval process compared to traditional bank loans. The absence of extensive credit checks and other stringent requirements allows for quicker loan decisions.
- Increased flexibility: P2P Bitcoin loans provide more flexibility in terms of loan conditions. Borrowers can negotiate interest rates, loan durations, and other terms that better suit their needs.
- No credit checks: P2P Bitcoin lenders generally do not conduct extensive credit checks. This means that individuals with poor credit history can still have access to loans.
Here are platforms that offer p2p crypto lending services:
Lend at Hodl P2P Crypto Loans
Lend at Hodl Hodl is a non-custodial peer-to-peer (P2P) crypto lending platform that allows you to lend or borrow Bitcoin. As a non-custodial P2P crypto lending platform, you have full control over you Bitcoin. Hodl Hodl uses an escrow service for its lending service. When a loan is initiated, your collateral is held securely in a multisig wallet until the loan terms are fulfilled. The lender must approve the loan, and upon approval, the funds are released to you. In the event of a loan default, the lender can request the release of the collateral from the escrow service. The escrow service will then transfer the funds back to the lender.
Lend at Hodl Hodl’s origination fee is between 0.5 to 1.5% of the loan amount based on the contract period. Hodl Hodl fees are paid by the borrower. Lend at Hodl Hodl takes a 2% commission. Commission will automatically be charged after the Contract comes into force. Origination fees according to the loan duration are: 1 day: 0.5%, 1 week – 5 months: 1% and 6 months – 12 months: 1.5%
LendaBit Cryptocurrency P2P Lending
LendaBit.com is a platform that facilitates connections between lenders and borrowers, allowing them to negotiate and finalize loan agreements. The platform allows you to use your crypto assets as collateral. Both borrowers and lenders are required to undergo KYC (Know Your Customer) verification to ensure compliance with regulatory standards.
Prospective borrowers can submit Loan Requests, while lenders can offer Loan Offers, specifying their preferred loan parameters such as interest rate, loan term, and loan amount. The platform maintains a fixed interest rate that is designed to be attractive for both lenders and borrowers. There is a 1% system fee you have to pay from the loan amount you are borrowing. Minimum loan term is 1 day while the maximum loan term is 3 years.
BTCPOP Loan
BTCPOP is a UK based p2p platform that provides peer-to-peer Bitcoin loans. The platform considers reputation and not credit score or financial history when giving a Bitcoin loan. You can get a loan from lenders, and you can also give a loan to borrowers. It advances a minimum loan of 0.01 to 500 Bitcoin loans. It offers Bitcoin personal loans, Bitcoin business loans, and bonds with collateral.
To qualify for a crypto loan, you need to set up your account with a username, email, and password. You need to undergo a verification process, including SMS, address, and KYC (Know Your Customer) requirements. You also need to link your social media accounts to build your reputation with BTCPOP.
How to Build Reputation With BTCPOP
- Have collateral. To build a good impression, take collateral loans and then make sure that you fully pay the loan.
- In case you have other platforms such as social media platforms where you have a strong reputation, you can port it by sharing the information with BTCPOP.
- If you know a person that uses BTCPOP and has a strong reputation, you can use them to help you build your reputation. Being active in the community can also play a key role in building your reputation. If your peers see you positively, then your loan is likely to be approved quickly.
Crypto Loans: Unlocking Financial Freedom with Cryptocurrency
Crypto loans offer a range of advantages to you in the digital era. With collateral requirements, you can access funds while retaining ownership of your valuable crypto assets. The absence of credit checks and KYC verification provides anonymity and opens doors for individuals with less-than-perfect credit. Additionally, you have the flexibility to choose between cash needs and holding onto you crypto assets, granting you financial freedom and the potential for future gains.
What's a crypto loan?
A crypto loan is a type of loan where a cryptocurrency is used as collateral. This means you provide your crypto as security to the lender. If you fail to repay the loan according to the agreed-upon terms, the lender has the right to sell the cryptocurrency collateral to recover the loan amount.
Can I get a bitcoin loan?
Yes. If you own cryptocurrency, it is indeed possible to acquire a bitcoin loan through a variety of crypto lending platforms and services.
How to get crypto loan without collateral
While obtaining a crypto loan without collateral is still a relatively new concept, there is an increasing number of crypto lending platforms that now provide this loan option. You can check out crypto lending sites we have listed in this article.
What is P2P crypto lending?
P2P crypto lending enables borrowers and lenders to engage directly with one another, bypassing the involvement of third-party intermediaries in the lending process.
Can I get bitcoin loan with bad credit?
Getting a bitcoin loan with bad credit is indeed possible due to the option of using your cryptocurrency holdings as collateral.
Can I get crypto loan with no KYC?
Several crypto lending platforms provide loans without requiring Know Your Customer (KYC) verification. Most of these platforms often operate on a peer-to-peer (P2P) lending model, facilitating direct interaction between borrowers and lenders.
Can I get a bitcoin loan with SSN?
Yes, it is possible to get a bitcoin loan with your Social Security number (SSN). However, not many crypto lending platforms require an SSN, KYC or conduct credit check.
Can I borrow USDT loan without collateral?
USDT loans without collateral are rare due to risk. Lenders need security in case of default. Some DeFi platforms offer USDT loans without collateral, called flash loans, but only experienced traders should use them due to high risk. Find out more about how to borow USDT.