What You Need to Know About Instant Bitcoin Loan with Collateral

Bitcoin Loan

Since its inception over a decade ago, Bitcoin has evolved into a flourishing ecosystem. The users of this particular digital currency and other digital coins perceive them as a medium of exchange and a store of value, thus deem them to be assets. In the same way that you can use a physical or financial asset to secure loans, you can use Bitcoins as security for a loan. The good news is that you can get an instant Bitcoin loan with collateral. This is no different from getting a loan in a fiat currency such as the US dollar. However, Bitcoin loans come with unique benefits and risks.

Understanding instant Bitcoin loan with collateral

Are you wondering what a Bitcoin loan is? It is a loan that you can access by putting up digital assets as security. In the Bitcoin ecosystem, one of the key investment strategies is HODLing. This refers to holding onto your BTC irrespective of the price.

Due to the growth of Bitcoin HODling, a large proportion of the Bitcoin community has amassed huge volumes of digital currency. However, such investors will find themselves in need of cash from time. One of the obvious options to get some money is to liquidate the Bitcoins they have previously held on to.

Bitcoin loans save them from having to sell their holdings and instead offer the HODLers a chance to put their coins up as security to access finance. But due to the volatility of Bitcoins, most loan providers or lenders only extend loan-to-value (LTV) loans. In some instances, the lenders offer a maximum of 50% LTV, meaning you have to put up digital coins whose value is double the loan amount as collateral. As such, you may need a lot of collateral to have your loan approved. Some of the Bitcoin loan providers include YouHodler, BlockFi, Nexo, Celsius Network and others.

How to Get instant Bitcoin loan with collateral

YouHodler is one of the best crypto loan providers because it offers instant Bitcoin loans for borrowers who can provide collateral, so the borrower gets funds quickly against their crypto assets. The platform has the highest LTV (standing at 90% for Bitcoin loans). Most other players offer an  LTV that averages 50% with  Salt Lending offering 70% LTV. YouHodler also offers loans as low as $100, and you can receive your funds in several fiat currencies like US dollars, euros, Swiss francs or British pounds. You can also receive funds as Bitcoins. Besides, it offers an unlimited loan term, and interest payments are payable at the end of the loan term.

Below are the steps to follow to get a Bitcoin loan with collateral:

·   Select a platform

·   Open an account

·   Deposit your BTC into the account. If you use YouHodler, it has no fees for crypto deposits or withdrawals.

·   Your loan approval happens in seconds, and you instantly get your money in USD, GBP, BTC, UST or other currencies, depending on the platform. You can withdraw the cash immediately into your credit card or bank account.

·   Once you repay your loan, you get back your collateral. You can make repayments through different options such as a credit card, bank account and stablecoins, depending on what the platform allows.

Pros and cons of instant bitcoin loan with collateral

Below are some of the pros of a Bitcoin loan with collateral:

·   Faster processing

·   No credit checks

·   May offer borrowers a chance for better interest rates

The cons include:

·   Long-term lending may deny the Bitcoin holder the chance to leverage any price spikes

·   Lack of Bitcoin regulation in some jurisdictions exposes borrowers to risks of scams


Instant Bitcoin loans with collateral or crypto lending generally is a relatively new development but offer so many benefits. However, there are some pitfalls; hence, the borrowers and other parties involved have to be cautious.

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