If you’re looking for a crypto lending platform or make your crypto work for you to earn a passive income, you may want to consider reading on. In this article, we’ll discuss what crypto lending is, how crypto lending works, the difference between trading and lending, and the Best crypto lending platform.
Crypto lending has gained popularity over the past few months as an increasing number of investors want to earn passive income on their crypto-assets.
What is crypto lending?
Crypto lending is a process of lending fiat money or cryptocurrencies to other borrowers in exchange for interest payments. The lending process typically involves three parties: a borrower, a lender, and a platform. Those platforms connect you – the lender- with the borrower.
The borrower deposits crypto-assets as collateral which secures the lender’s investment.
How does crypto lending work?
Cryptocurrency lending services connect borrowers to lenders on their platforms. Borrowers use their crypto assets as collateral to obtain a fiat or stable coin loan, while lenders provide the assets required for the loan at an agreed-upon interest rate. Lenders receive their cryptocurrencies back once the borrower pays back the loan.
Let’s break Crypto Lending down in simple term:
- You sign up on one of the platforms and deposit funds to your investment account
- You choose your investment product and invest in secured loans
- The borrower repays the principal with the accrued interest back to your account.
What’s the difference between trading and lending
Crypto trading, you put money inside a cryptocurrency trading platform, such as Binance, Kucoin, Crypto.com, Luno, Remitano, etc. Then choose what type of cryptocurrency you wish to buy (Bitcoin, Ethereum, etc.) and make your purchase. Once the price for cryptos has gone up, you sell it back to the exchange and cash out.
- Read Also: How to Make Money With Cryptocurrency
Crypto lending, you lend your funds to other traders who trade with it. In return for lending, you earn an interest rate which can go from 5% to 50% per year depending on the platform.
Here are the top 6 crypto lending platform to earn passive income.
The top 6 crypto lending platform
CoinLoan, an Estonian platform, founded in 2016 by a company called ExFinance OÜ. It is one of the first P2P crypto lending platforms for crypto-backed loans.
They have a simple setup process, bank-grade security, and they offer crypto lending and borrowing in various cryptocurrencies. A Great thing about CoinLoan is the broad variety of cryptocurrencies supported. Borrowers just need to enter the desired amount and term to know the total repayment amount. CoinLoan offers up to 10.3% APR.
Click here to Earn an Extra 25% bonus Interest with CoinLoan
Binance is known worldwide as the biggest cryptocurrency exchange in terms of the trading volume. How this exchange work. You deposit crypto into your Binance account, lend it to margin traders which in turn pay you interest, and this will result in an increase of your funds.
Binance offers varieties of coins and two types of options, Flexible Savings, and Fixed Savings.
For Fixed Savings, it means you will be subscribing to locking your funds for a certain amount of time.
Flexible Savings, however, you will have the freedom to withdraw your funds at any time, and the interest rates, in this case, will vary over time. Your interest rate will be higher when you chose Fixed Savings for a longer period.
Click here to start earning with Binance + 5% bonus on trading fee
- Read more about Binance in our Binance Review
Crypto.com is an all in one platform that offers various services ranging from buying, selling, and lending cryptocurrencies.
The exchange is a provider of a service called “Crypto Earn”. They provide this service through their mobile wallet application.
Crypto Earn allows you to lock your tokens for three different terms, each returning you a different interest rate. The longer the term, the higher the interest rate. The exciting thing about this platform is that there’s no set deadline to repay the loan, and the interest rates on loans are a bit lower compared to other crypto lending platforms.
As a lender, you don’t have to worry, as you can invest your assets on this platform and watch them earn a considerable interest.
Crypto.com has been able to achieve a high degree of customer confidence with the levels of security that they’ve built into their system.
The payouts occur on a weekly basis and are deposited directly into your Crypto.com wallet.
- Read more about Crypto.com in our Crypto.com review.
Click here to signup and start earning with crypto.com + $50 free
Celsius Network is a UK-based crypto lending platform that was launched back in 2017 as a crypto wallet and mobile application. All its features are accessible from a mobile phone and the platform is very user friendly. Currently, users are able to buy, earn, and borrow directly on the blockchain using the Celcius Network, which is a very nice portfolio of features.
When borrowing you will get access to fiat funds by using your crypto as your collateral, and by doing so, you will be paying minimal interests. As a lender, it will generate a passive income in your Celsius Network digital wallet.
The site offers very competitive interest rates for customers and you can get up to 12% when depositing your crypto into their wallet.
Click here to earn passive income with Celcius Network
Nexo is an Estonian blockchain P2P crypto lending platform.
The company was founded in 2018. The platform has established itself as a trusted name in the crypto industry, as they have succeeded in securing Licenses and Insurances for the cryptocurrency stored within their services.
Users transfer their assets into a secure Nexo wallet, and from there, those assets come under the protection of the BitGo repository.
Nexo also offers a crypto visa card that you can load your money onto, in order to spend your proceeds more easily.
Nexo is so satisfying to many that it is considered to be the leading platform in the crypto loan industry with great potential to grow to an even bigger platform with years to come.
They rely on Onfido when it comes to regulatory compliance. The company has provided $1 billion worth of instant crypto-backed loans worldwide, making it one of the most popular platforms.
Click here to start earning with Nexo
BlockFi is one of the leading lending platforms in the cryptocurrency ecosystem. They offer a wide range of lending products.
The platform allows you to access a loan in a few minutes after your request, which attracts a lot of lenders and borrowers and making it very popular in the crypto market.
Also, the platform allows wire transfers that convert fiat money to stablecoin at a 1-to-1 ratio.
As a lender, l you can generate a passive income with your crypto, and also, you can withdraw your funds at any given time.
Click here to start earning with BlockFi
You can also read how to Earn Bitcoin Without Buying: 4 Simple Ways to Earn Bitcoin In 2020