Crypto Life (CL)
3 min readDec 19, 2022

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Can you get a crypto loan without collateral?

By now, we’re all familiar with crypto loans.

Many people in the crypto space see them as a faster and easier alternative to traditional bank loans. They offer accessibility to those who may not have a bank account or have a poor credit history, and are approved much faster.

But despite these differences, crypto loans still follow the same concept as traditional loans. The lender will lend out their assets to the borrower, who in turn, will have to prove that they can repay the loan back. In other words, this means that the borrower will have to put deposit collateral, which in this case, would be their cryptocurrency holdings. If the borrower is unable to repay the loan, the lender will take the borrower’s collateral in return.

However, there are some out there who aren’t entirely on board with providing collateral to begin with. This could be due to not owning any cryptocurrency, or not wanting to part with their holdings to take out a loan.

So the question is — are crypto loans without collateral a thing?

The short answer is yes. There are platforms out there that offer crypto loans without any collateral required. So how does it work?

One example is Goldfinch, a decentralised global credit protocol that specialises in providing business loans. The platform is powered by four main parties — borrowers, investors, liquidity providers and auditors. Here’s a quick rundown of what they do.

  • Borrowers — The business that wishes to take out a loan. They raise capital in the platform’s pools, which are smart contracts that set out terms and conditions for the borrower, including interest rate and repayment schedule).
  • Investors — Another word for lenders, who lend their assets to the borrower as first-loss capital.
  • Liquidity providers — Provide capital to the pool to generate passive income.
  • Auditors — Responsible for approving the borrower’s request.

Another prime example is Atlendis, which also offers uncollateralized crypto loans. To take out a loan, users have to pay a fee into a liquidity pool. Lenders can also choose who they lend their assets to. The protocol offers borrowers flexibility for short-term liquidity needs, while lenders can earn good returns on actively loaned out capital.

Are there any risks?

While taking out a crypto loan without collateral sounds ideal, it’s also important to be aware of the risks.

The first and most obvious is cryptocurrency’s volatility. Whether a crypto loan is collateralized or uncollateralized, your borrowed amount may lower if its fiat value decreases.

There are also scams to be aware of. There are many kinds of crypto scams out there, and bogus loan providers are one of them. Before choosing a platform to lend or borrow crypto, it’s important to not give out any personal information and look into the provider’s track record.

Finally, uncollateralized crypto loans tend to have higher interest rates than collateralized crypto loans, which could end up being more expensive in the long run.

Why choose Cryptodraft and Stableloans?

Cryptodraft and Stableloans are collateralized, but you can borrow a line of credit without selling your crypto, plus get the first 10% LTV interest-free!

Make your crypto work for you

Get extra funds to spend on your card without selling your crypto! Easily access a line of credit, while using your crypto as collateral.

  • Quick and easy approval
  • Get up to 10% LTV with 0% monthly interest
  • Spend up to 60% of your collateral value
  • Spend on your card without selling your assets
  • Choose how much you want to borrow and for how long

Open a Cryptodraft

Take control with a Stableloan!

Stableloans make borrowing a piece of cake! With a quick and hassle-free set up, you can instantly take out a line of credit, while retaining ownership of your crypto.

  • Fast approval process
  • Instantly take out stablecoin assets, including USDT, USDC and EURT
  • Choose how much you want to borrow and for how long
  • You’ll always know how much interest to pay

Open a Stableloan

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