Are you looking to invest your bitcoins and earn interest? Do you need to borrow some bitcoin money? We list places that offer lending bitcoins or getting a bitcoin loan. A loan in bitcoin could be made and then repaid without the need for a third party. Since the system works exclusively with the digital currency bitcoin, neither the borrower nor the lender need a bank account to participate in a global loan market.
The most common and safe place to get a bitcoin loan or to earn interest with bitcoin lending is online website that matches bitcoin lenders and borrowers. There are quite a few bitcoin lending platforms online. We only list the most popular and reliable p2p networks. Another option is to find someone to do the loan deal on one of the popular bitcoin related forums or by meeting someone personally.
Bitcoin lending platforms
These peer-to-peer platforms bring together bitcoin lenders and borrowers. They operate worldwide and are a safe and instant way to get a loan or to invest your bitcoins.
- BitLendingClub is international bitcoin lending platform. Global lending marketplace which uses blockchain technology. It provides small businesses in emerging markets with access to capital at affordable rates from worldwide lenders.
- BTCJam is an online investing and personal loan service. Bitcoin lending through a peer-to-peer market place. Does not support customers from United States.
- BitBond is another global peer-to-peer bitcoin lending platform where small businesses get affordable loans while lenders earn profitable interest rates.
- BTCPOP – offers p2p banking experience with instant loans. It is the only lending site to offer instant loans after a qualifying period within the bitcoin domain.
- BTCLend – provides lenders and borrowers a trusted place to perform bitcoin lending. Trusted based loans can include collateral.
How to get a bitcoin Loan
The process of applying for a loan is pretty simple. First, an on-line account in one of the lending sites above is needed. Then users will be asked to verify their details before creating the loan listing. The next step requires borrowers to enter the required amount, the time period of the loan and the intended interest rate to pay on the loan. If there is a lender in the system who is already listed and ready to lend at suggested terms, the loan process is instantly completed. If not, the borrower waits for offers, reviews offers, accepts the best offer and receives bitcoins.
If you are in a hurry and do not have time to negotiate, BTCPOP offers its users the chance to take out an instant loan. The great thing about instant loans is that what you do with your loan is totally up to you as your instant loan is completely private compared to a standard loan listing where you have to declare your reasons for getting a loan.
Profitable bitcoin lending for investors
On the other side, bitcoin owners can lend their bitcoins to the loan seekers for some extra profit. But, it must not be forgotten, that there are some risks involved – the borrower might never pay back or miss out on payments.
Bitcoin lending process
For bitcoin lender we suggest to use on or more platforms listed above as they provide more safety to bitcoin lending process compared to forums or bitcoin communities. They often have a thorough verification process for borrowers. For example, BitLendingClub requires from a borrower email verification, ID verification, address verification, phone verification and income verification. Similar verification process has the world’s largest bitcoin peer to peer lending network BTCJam with even more verification options. They also display user’s credit rating that is calculated by taking into account the amount of verified information they have about a user, user’s past repayment behaviour, number of open credit lines, frequency of loans, and number of late payments.
Autoinvest option for investors
BTCJam, BitLendingClub and BitBond have an interesting feature that allows investors to easily diversify their investments into 100’s of loans with a few clicks. This tool builds a portfolio automatically according to investors preferences. Platforms claim that autoinvest users are currently averaging 13-14% in returns, but comments on some forums from investors reveal that the real number is around 10%. At BitLendingClub lenders are able to chose between safe, smart and risky strategies, depending on their risk appetite. Each strategy is tailored to provide maximum diversification of the lenders’ portfolios, which results in consistent positive returns.
Bitcoin lending tips
In general, bitcoin lending business is similar to general investing. Nevertheless, we highlight a few important principles you should consider when lending bitcoins as a money-making opportunity.
- Diversify – a basic principle of all investing. Place many smaller loans instead a big one. With one big loan, the potential return might be larger, but the same applies for the potential loss. Only fund 10% or less of the requested amount. One single loan should not take more than 5% of your portfolio. Also, you may use an autoivest option described below. Put your bitcoins on multiple platforms as well.
- Study loan-seeker carefully – from the loan description you can see why the borrower needs bitcoins. The description should make sense to you. If it is too good, don’t buy it. Check if this person already repaid loans in the past. What is their current debt? Check profile comments. Did the person reveal any personal info, such as Facebook profile?
- Lend only what you can afford to lose – bitcoin lending business is risky. If you need this money to pay your bills or to pay back debt, don’t invest it here. As always, things might go wrong and not all borrowers repay as they are supposed to.
- Look for insurance – BitLendingClub has partnered with a collection agency in order to pursue delinquent borrowers. All delinquent loans are sent to the collection agency, which will pursue all legal means of collecting the debt.
Doing business on forums
You can find both, investors and borrowers, on popular bitcoin related forums. This is often a tricky option, so we suggest you to do this with extreme caution.
How to do the deal on a forum? First, find an interesting offer, check the investors/borrowers profile, check his forum reputation and negotiate the deal.
A few things that need to be mentioned when doing loans on forums. Beside interest rates you will often hear the term collateral. This is a sort of insurance that borrower will return bitcoins to bitcoin lender. In other words: in order to get a loan, you must give something that is equal, or slightly higher to the amount you are being loaned. Normally lenders will want things such as other cryptocurrencies or precious metals, although things that can be easily resold electronically are preferred. Also, non-material commodities can be used as collateral, for example, some user will say “my collateral is my account on this forum”.
We suggest you to check two Bitcointalk threads – one is for bitcoin micro loans and short term lending, the other one is more related to long-term bitcoin loans. To minimise trouble and scams you can also use an escrow service within this forum to avoid being tricked somehow.
If you are a Reddit user, check this Reddit thread. Any Reddit user is able to ask for a loan in bitcoins anonymously in this special subreddit without revealing identity. However, the loans are very small and users need to have a good account history on Reddit.
As oppose to lending platforms, bitcoin lending process on forums has one major advantage for both investors and loan seekers. Less verification is needed here and more anonymity is provided, but there are more risks involved.
- BTCPOP also offers bitcoin savings account that daily pays interest on your coins.
- You can lend money to bitcoin traders at some bitcoin trading platforms and get paid interest for that. You define loan terms on the marketplace for loan demands and offers. See Poloniex for example.
- You can also get bitcoin credit at Dwolla, bitcoin payment service. The service is called Dwolla Credit and if you are U.S. citizen you can get approved for up to $16k in a line of credit. There are no upfront fees, and it takes only minutes to apply.
- From Argentina?The Argentinian bitcoin wallet provider, Bitpagos, is now offering users credit through its Ripio offering. The feature will be initially available to a select group of users in Argentina who will be able to borrow up to $1000 from the service.
- There are other platforms that for some reason we did not include on the list above: StemFund.
- Please check also other bitcoin money making opportunities.