Best Bitcoin Loan Programs

What is a Bitcoin loan?

Bitcoin is popular not only as a digital currency, but also as a store of value.

That’s why Bitcoin is not only a form of currency, but also an asset that can be used just like other assets to get a loan.

A Bitcoin loan is a traditional loan that’s just like the one offered by banks.

Users can borrow money by keeping their Bitcoins as collateral, which has to be paid back with interest over the predetermined time period. The borrower can choose to pay back the loan in monthly equated installments or at once depending on the terms of the agreement.

Why Get a Bitcoin Loan

Those purposes might include anything such as traveling the world, buying a home, diversifying a portfolio by investing in other asset classes, investing in a business, or paying off other high-cost debt. So, once a user has weighed the pros and the cons of taking out a Bitcoin-backed loan, they can look at some of the following offering Bitcoin-backed loans.

  • Unchained Capital
    • Get access to your loan in less than 48 hours
    • Smooth, clean interface makes the process simple
    • Bitcoin stored in multi-sig custody
  • BlockFi
    • Also offers ability to earn interest on Bitcoin
    • Has raised over $60 million in VC funding
    • Can use Bitcoin, Litecoin or Ethereum

Bitcoin Loan Companies

Here is a deeper look at a couple popular Bitcoin loan companies:

Unchained Capital

unchained capital

Unchained Capital is another crypto-finance company that potential borrowers can look at to get a loan on their crypto holdings. The company closed a $3 million seed funding round in June 2018.

The basic idea of what Unchained Capital is doing is similar to BlockFi – allowing crypto investors to diversify their holdings into other asset classes by putting Bitcoin or Ether as collateral in return for U.S. dollars. Listed below are some of the key features of the company’s loan offering.

Application Process


Unchained Capital provides both business and consumer loans. However, its reach is limited as compared to BlockFi since it doesn’t offer loans in all states as evident from the map below.

If an applicant is in Unchained’s jurisdiction, they will have to log on to their website to sign up for an account and complete the loan application process. The company requires the usual KYC/AML documentation. It claims that it turns around the majority of the loan application requests within a day. Once the loan is approved, the borrower will have to send the collateral – either Bitcoin or Ethereum – into Unchained Capital’s cold storage vault that’s dedicated to the loan.

Once Unchained Capital receives the collateral, the loan will be disbursed into the borrower’s bank account. Like BlockFi, Unchained Capital doesn’t carry a check on the applicant’s credit score, though they may conduct a soft credit pull. In case of a business loan, Unchained Capital requires that the business provides information about all of its officers, directors, and shareholders who have a stake of more than 20% in the business.

The minimum loan amount for domestic loans is $10,000, while for international loans it is $100,000. The maximum loan amount that can be availed is $1 million.

Duration and Rates

Unchained Capital’s website shows that it charges interest rates between 8% and 14% for loan durations ranging between 3 months and 60 months. The company also charges loan origination fees of 1%-2%. The borrower will then make monthly interest payments for the duration of the loan, while the last payment will also include the principal amount.

Unchained Capital also gives the borrower an option of renewing the loan at the end of the tenure with “potentially” new terms so as to defer the principal repayment. Additionally, the company doesn’t charge any prepayment penalties, allowing the borrower to close the loan at anytime without any additional charges.

Loan to value ratio and margin call

Unchained Capital has a loan to value ratio of 50%. This means that customers can borrow $1 for every $2 of crypto collateral that they deposit. As such, a borrower needs to have at least $20,000 worth of Bitcoin or Ether in order to get a loan from Unchained Capital to meet its minimum lending amount.

However, in case the value of the collateral drops by 25%, Unchained Capital will make a call to the borrower and request for additional collateral or a principal repayment. In case the borrower doesn’t act and the value of the collateral goes down by 45%, Unchained Capital can take over the collateral and sell the same to recover the principal and any outstanding interest amount. In case the value of the cryptocurrency increases and the loan to value ratio hits 40%, borrowers can request partial return of the collateral under certain terms and conditions.

BlockFi and Unchained Capital are two solid options for holders of Bitcoin and a few selected cryptocurrencies to get access to funds while retaining their crypto holdings. However, there are some basic differences between the two. BlockFi has a lower entry barrier as compared to Unchained Capital, and it is operational in more areas.

However, Unchained Capital’s advantage is that it provides loan for a longer duration, and also offers discounted interest rates for short-term loans of 3-6 months as a part of a limited-time promotional campaign. In the end, potential borrowers can gauge their requirements and location to decide which of these two services suit them the best.



New York-based non-banking lender BlockFi is one of the most popular companies offering cryptocurrency-backed loans.

The company had raised $1.5 million in seed funding earlier in 2018 from SoFi, Kenetic Capital, and ConsenSys Ventures. This was followed by a massive $52.5 million fundraising round led by Galaxy Digital Ventures.

BlockFi will use $50 million of the fresh capital infusion to provide loans to its customers. Moreover, BlockFi founder Zac Prince, who originally comes from a consumer lending background, had hinted in July this year that the company’s lending to corporate, retail, and institutional investors was nearing “eight figures,” though he didn’t provide an exact number.

So, BlockFi is a credible name in the cryptocurrency-backed lending space that one can look at to collateral their Bitcoin and get access to funds in fiat currency. Let’s see how it works.

Blockfi also allows users to earn interest on their bitcoins.

How Does BlockFi Work?


BlockFi’s website says that it takes just two minutes for a user to apply for a Bitcoin loan. Once a user submits the application, the BlockFi team will review the application and present the applicant with loan terms in a matter of just few hours. Once the user accepts the terms and sends the collateral to BlockFi, the company will wire the loan in USD directly into the applicant’s bank account.

BlockFi claims that applicants can get the money into their accounts in just 90 minutes from the start of the application. That’s what makes the company one of the fastest crypto-backed lenders in the U.S., where it currently operates in 46 states. In fact, the process of applying for a Bitcoin loan on BlockFi is not a very complicated one. Let’s take a more detailed look at the application process and some of the other points that potential applicants need to be aware of.

The Application

Consumers looking to apply for a Bitcoin-backed loan on BlockFi will have to visit the company’s website where they will have to sign-up by providing the name, email address, password, country, state, and phone number. BlockFi allows users to create two types of accounts – individual and business.

Once the sign-up is complete, the applicant can feed in the required loan amount, when they’ll know the amount of cryptocurrency that they’ll have to put as collateral, and the documentation needed for KYC/AML purposes. More importantly, BlockFi won’t carry any checks on the applicant’s credit, so the credit score would remain unaffected.

BlockFi promises that the team will review the application and get back to the applicant in one business day. Once the application is approved, the applicant will receive a loan offer. However, BlockFi claims that it can arrive at a decision in just two hours if the application is received within business hours.

If the applicant is satisfied with the loan offer, they accept the same and send the collateral Bitcoin, Litecoin, or Ether to BlockFi’s custodian – Gemini – and get the loan amount wired into their account.

Limits and Rates

BlockFi’s interest rates start as low as 8%, and they aren’t dictated by a customer’s credit score. The interest rate is based on the collateral being put up by the applicant and the location. Additionally, BlockFi charges a loan origination fee that averages around 1% to 2% of the loan amount, which is determined by the loan amount requested by the applicant, their location, and the credit history.

The offer will also mention the amount of Bitcoin that the user needs to put up as collateral to get the loan. BlockFi states that it provides a loan up to 50% of the value of the crypto collateral pledged by the applicant. The minimum loan amount that a customer can apply for is $2,000, which means that he or she will have to put double that amount in terms of Bitcoin as collateral.

The maximum loan amount that BlockFi users can avail of is $10,000,000. Additionally, the loan will run for a maximum period of 12 months, during which the borrower can choose to make only interest payments on a monthly basis using crypto. At the end of 12 months, the borrower can either pay off the principal in one lump sum payment, or refinance the loan at the same rate. Another notable feature of the BlockFi is that it doesn’t charge any prepayment penalty, so a borrower can repay the loan at any time during those 12 months and get back the collateral to their specified address.

Other important points:

BlockFi borrowers need to keep a watch on the value of the Bitcoin they have pledged as collateral. If the value of the collateral significantly drops, it will set off a trigger event and the borrower will have to add more collateral to the account in order to maintain the 50% loan to value (LTV) ratio.

BlockFi states that the first trigger event will occur when the LTV hits 70%, which would happen if the price of the cryptocurrency drops 50% from the value it was at when the loan was originated. Once the trigger event happens, the borrower will have 72 hours to provide additional collateral or will have to close the loan by paying the outstanding amount.

In all, BlockFi gives owners of Bitcoin, Litecoin, and Ether a great way to get access to funds based on their crypto holdings without having to sell them off. The company’s rates are also quite competitive, though users will have to be aware of the fact that they might need to post more collateral or pay off the loan in three days if the value of the cryptocurrencies fall substantially.

Benefits of a Bitcoin Loan

However, this is where the similarities of a Bitcoin lending program end. The first thing that users need to keep in mind is that Bitcoin isn’t controlled by a government or some central authority, so there’s some risk involved. For instance, if a user is borrowing from a lender located in another country by keeping their Bitcoin as collateral, he or she will find it difficult to hold the lender accountable in case the regulatory conditions of that country change for the worse. Additionally, the volatility of Bitcoin prices means that you’ve to be prepared to pay up additional collateral in case the value of the cryptocurrency declines.

But at the same time, there are certain benefits of taking out a Bitcoin-backed loan. For instance, a Bitcoin-backed loan is ideal for users who don’t want to sell their cryptocurrencies just yet, but want to monetize the same. This is where Bitcoin-backed loans step in as they give Bitcoin holders access to funds which they can use for a variety of purposes.

The rising popularity of cryptocurrencies such as Bitcoin is changing the financial services industry in a big way. Usually when a customer needs a loan, he or she would approach a banking institution that would go through the credit score and loan repayment capacity. The customer might have to put down some collateral as well and probably wait for the banking institution to follow their long process before getting the loan.

However, the evolution of the financial technology sector has given rise to concepts such as peer-to-peer borrowing and lending in fiat currencies. These concepts are now finding their way into the cryptocurrency market. For instance, someone holding Bitcoins can get a loan from one of the many companies offering Bitcoin loans out there by keeping their digital currency holdings as collateral.

  • Interest Rate 8 - 14% 4.5 - 9.75%
    Origination Fee 1 - 2% 2%
    Loan Duration 3 - 60 Months 12 Months