Crypto Loans: How They Work, Risks, and Where to Use Them
When you take out a crypto loan, a type of financial arrangement where you pledge your cryptocurrency as collateral to borrow fiat or stablecoins. Also known as crypto lending, it lets you access cash without selling your coins—keeping your position intact while still using your assets as leverage. This isn’t magic. It’s basic finance, but with blockchain rules: no banks, no credit checks, just smart contracts and collateral.
Most decentralized finance, a system of financial services built on open blockchains without intermediaries. Also known as DeFi, it enables these loans through protocols like Aave, Compound, or MakerDAO. You lock your BTC, ETH, or other coins into a smart contract. In return, you get a loan—usually in USDC or DAI—based on how much you put up. The system automatically monitors your collateral. If your crypto drops too far in value, you get a margin call. If you don’t add more, your assets get sold to cover the loan. No one calls you. No late fees. Just code enforcing the rules.
Not all collateralized loans, loans backed by an asset you own, used to reduce lender risk. Also known as secured loans, they’re the backbone of crypto lending work the same. Some platforms let you borrow up to 80% of your collateral’s value. Others cap it at 50%. Some charge interest hourly. Others let you lock in fixed rates. And while some services are fully decentralized, others are centralized exchanges offering loans with KYC—like BlockFi (before it collapsed) or Celsius. That’s why you need to know who you’re trusting. A DeFi protocol isn’t regulated, but it also isn’t run by a CEO who can vanish overnight.
Why do people use crypto loans? Some need cash for bills or investments and don’t want to sell their Bitcoin. Others use them to buy more crypto—leveraging their position. A few even borrow stablecoins to earn yield elsewhere, betting the returns will beat their loan interest. But it’s risky. Crypto prices swing fast. A 20% drop in your ETH can trigger a liquidation if you’re over-leveraged. And if the platform you’re using has poor security or weak audits, you could lose everything—even if you never missed a payment.
There’s no one-size-fits-all. The best crypto loan for you depends on your goals, your risk tolerance, and the coins you hold. Some platforms support dozens of tokens. Others only take Bitcoin or Ethereum. Some let you repay early with no penalty. Others lock you in. And while many focus on DeFi, others—like centralized exchanges—offer faster access and customer support, even if they’re less transparent.
Below, you’ll find real reviews and deep dives into platforms that offer these loans. Some are safe. Some are traps. We’ve looked at fees, liquidation thresholds, supported assets, and whether the service actually works in practice—not just what their marketing says. Whether you’re new to crypto lending or you’ve been using it for years, you’ll find clear, no-fluff breakdowns of what’s real, what’s risky, and what’s just hype.
