Best Crypto-Backed Loan Platforms

Crypto-backed loans let you get cash or stablecoins without giving up your crypto.

You lock up $BTC, $ETH, or another asset as collateral, borrow stablecoins or cash against it, and still get to ride the upside if prices climb.

Sounds great, right…but where do you even start?

No need to fear – here’s your complete Milk Road guide to the top 7 platforms for getting your first crypto-backed loan.

Our Milk Road Pick: Ledn

Best for: Bitcoin holders who want to borrow, earn, or double their stack without selling.

Why Borrow with Ledn?

• $10.5B+ loaned, zero client losses
• Verified Proof-of-Reserves every 6 months
• B2X tool to double BTC exposure
• Borrow fiat or stablecoins.

4.7

Learn More

Via Ledn's Website

Why Borrow Against Crypto?

Borrowing against your crypto is a smart move if you need cash or stablecoins but don’t want to sell your crypto.

You can cover expenses, reinvest, or take care of short-term needs – all while keeping long-term exposure.

When you repay the loan, your crypto is released back to you.

Depending on your region, it can also be favorable for taxes since you avoid selling your assets to get that liquidity.

What Are The Types Of Borrowing Platforms?

There are three main types of crypto-backed loan platforms:

1. CeFi platforms: You hand over your crypto to a company, and they handle the loan for you – it’s the most simple, but they’re in control of your funds.
2. DeFi platforms: Everything happens automatically onchain through smart contracts. No people handle your funds – it’s all computer code running the show.
3. Hybrid platforms: A mix of CeFi and DeFi platforms. It might feel like using a normal app, but the actual lending happens on smart contracts in the background.

Best Borrowing Platforms Comparison

Best Crypto Loan Platforms

Think a crypto loan might be right for you? These are some of the trusted names in the industry:

1. Ledn

Ledn is an absolute lending beast.

Since launching in 2018, it’s processed over $10.5 billion in Bitcoin-backed loans – all without a single reported loss of client assets.

Remember when FTX collapsed and all the CeFi lenders like Celsius went down? Ledn didn’t even flinch.

Ledn lets you grab a cash or stablecoin loan against your $BTC, earn up to 8.5% APY on crypto (outside the US and Canada), or even double your Bitcoin exposure instantly with its B2X tool.

It’s transparent to its core, runs third-party Proof-of-Reserves audits every six months, and it’s easy-to-use for users of any experience level.

Safe, smart, and simple.

Why Borrow With Ledn?

• Easy access to fiat currency against your $BTC.
• Flawless track record: $10.5B+ loaned and zero client losses since 2018.
• They prove your money’s there, with independent audits every six months.
• Instantly double your BTC exposure with their B2X tool.

2. Aave

Aave is both fun to say (Ahvay) and intuitive to use.

The DeFi borrowing platform lets you borrow on your choice of 18 blockchains, each with a huge range of tokens available for borrowing.

If there’s a gotcha with Aave, it’s that in most cases, you’ll get a variable rate when borrowing.

Variable rates are based on supply and demand, so rates for high-demand tokens can spike pretty quickly.

People often use Aave for short-term borrowing or even flash loans (fixed-fee loans that are repaid within seconds) to reduce risk from variable rates.

Why Borrow With Aave?

• One of the biggest names in DeFi – battle-tested with tons of liquidity.
• Supports assets across several chains, not just Ethereum.
• Large lending pools for popular tokens help keep interest rates low.
• Advanced traders can use flash loans to take advantage of arbitrage opportunities.

3. Rocko

Rocko is a hybrid borrowing platform that makes it easy to borrow $USDC using your crypto as collateral.

It’s also one of the few platforms that will let you borrow against $BTC (wrapped), $ETH, AND $SOL.

Rather than jumping between platforms like Aave and Compound, Rocko brings them all under one roof.

It scans for the best rates across top protocols and serves them up in one clean, user-friendly interface.

The catch is, you can only borrow $USDC.

Why Borrow With Rocko?

• Offers the best rates across major DeFi lending protocols, with CeFi ease.
• Lets you borrow against $BTC, $ETH, and $SOL.
• Non-custodial and supported worldwide – no restrictions.

4. Nexo

Nexo is one of the largest CeFi lenders still in the game, letting you borrow fiat, stablecoins, or even more crypto.

It accepts 100+ cryptos for collateral.

Getting started is easy: just deposit a supported crypto asset in your account as collateral and borrow with instant approval. Funding can take up to 24 hours.

The most powerful thing about Nexo is that it’s the only platform in this list that lets you borrow against a big bunch of other L1 assets.

That means you can borrow against your $XRP, $BNB, or any of several other coins.

Why Borrow With Nexo?

• Borrow against assets that most other platforms don’t support, like $XRP.
• Instant approval with no credit checks, funds typically available within 24 hours.
• Choose between fiat, crypto, or a combination to repay your loan.
• Massively reduce your loan interest rates by holding $NEXO tokens in your account.

5. Coinbase Borrow

Coinbase Borrow lets you take out instant $USDC loans using your Bitcoin as collateral – all without leaving the popular Coinbase exchange.

Even though it’s a feature offered on its centralized platform, Coinbase Borrow is powered by DeFi under the hood. More specifically, it’s powered by Morpho’s onchain lending protocol.

That means you get to enjoy complicated DeFi loans behind the scenes, but all through the ease of Coinbase’s user-friendly interface.

Despite only being able to borrow $USDC, Coinbase makes it easy to sell your $USDC for fiat if you need those funds in an IRL bank account.

Interest rates start around 5%, with your $BTC automatically wrapped as $cbBTC and held safely in a Morpho smart contract.

Why Borrow From Coinbase Borrow?

• Borrow up to $1M $USDC instantly against your $BTC.
• DeFi loans, but with Coinbase’s easy-to-use exchange interface.
• Low interest rates (as low as 5%) and no hidden fees.
• Easily sell your borrowed $USDC for fiat currency, if you want to use it IRL.

6. Spark

Remember Maker, and its stablecoin $DAI?

It was the original stablecoin protocol, and it’s been reborn under new names: Sky Protocol and the $USDS stablecoin.

Spark is the main app that runs on top of Sky Protocol, which makes it easy for users to mint and borrow $USDS.

To do so, users deposit any one of several Ethereum-based tokens, or even some real-world assets (RWAs) as collateral – and get to borrow up to 80% of its value.

Although Spark doesn’t support nearly as many tokens as Aave, it has more stable interest rates, and they’re often lower.

One of my favorite parts about Spark and Sky Protocol is its 1-hour oracle delay.

Sounds nerdy – but the idea is simple:

if the market dips hard, borrowers get a whole extra hour to top up their collateral before liquidation hits.

Why Borrow From Spark?

• More stable interest rates than other protocols, set by SKY token governance.
• Borrow $USDS, a decentralized stablecoin with wide support throughout DeFi.
• The only protocol where oracles are 1-hour delayed. Get a full hour to top-up or repay before any chance of liquidation.

7. Morpho

Morpho is a DeFi lending protocol on Ethereum and Base that flips the usual model on its head.

Instead of everyone sharing one big liquidity pool like on Aave or Compound, Morpho matches lenders and borrowers directly to each other whenever possible.

That means both sides can often get better rates.

No direct match? That's okay. In that case, lending automatically falls back to regular lending pools, so your money never sits unused.

Its main engine, Morpho Blue, powers 190+ customizable markets – that’s a ton of different token options.

Why Borrow From Morpho?

• Better rates through direct lender-borrower matching.
• 190+ token markets through Morpho Blue – more asset options than most other platforms (ERC-20 only)
• Anyone can create lending markets, not just governance.

8. Figure

Figure is a lending and & borrowing platform built on Provenance Blockchain that specializes in modernizing consumer lending, home equity products, and loan origination.

They're the largest non-bank HELOC lender in the U.S., with over $19 billion unlocked.

Figure’s foundation, the Provenance Blockchain, is designed specifically for financial services — giving lenders and investors transparent, auditable, real-time lifecycle data on every asset.

Its platform supports everything from home equity lines of credit (HELOCs) to mortgage refinancing to loan servicing, all powered by blockchain-based ledgers and smart contracts.

Why Borrow with Figure?

• Faster approvals and funding
• End-to-end lending infrastructure for both consumer and institutional partners.
• Everything happens via the Provenance Blockchain.

How to Borrow Crypto in 6 Steps

Step 1: Choose Your Borrowing Platform.

A borrowing platform is basically the middleman between you and the lender.

Think of it like Uber – but instead of rides, it connects people who need cash with those willing to lend it.

You’ll want to check the basics: interest rates, what kind of collateral they accept, what assets you can borrow, which countries they support, whether they require KYC, and how safe their track record looks.

As you can see above, there are tons of platforms out there – but only a few will really fit your specific needs.

If you’ve got $BTC, Ledn is our pick ;)

Step 2: Deposit Funds Into The Borrowing Platform.

Alright, now it’s time to hand over your crypto so the loan can actually start.

This means depositing your collateral into the platform you picked earlier.

• On DeFi platforms, you’ll connect your wallet (like MetaMask) and approve the transaction directly onchain.
• On CeFi platforms, you’ll send your crypto to the deposit address provided – just like making a regular crypto transfer.

The platform will usually guide you through it step by step.

Step 3: Choose A Crypto Asset As Collateral.

Now it’s time to lock in some crypto to secure your loan.

Most borrowing platforms only accept major assets – the ones with deep liquidity and stable demand.

They usually steer clear of “iffy” assets (think low-cap tokens) because they’re harder to sell and riskier during price swings.

The big names like $BTC and $ETH (or wrapped versions) are accepted almost everywhere for a reason.

Ledn keeps it extra simple by focusing on Bitcoin-only collateral – that means less volatility, fewer liquidation worries, and a smoother borrowing experience overall.

Step 4: Choose The Asset You Want To Borrow.

At this stage, you’ll usually have two main borrowing options – fiat currency (like USD) or stablecoins such as $USDC.

• Borrowing fiat means you’ll get real cash straight to your bank account, ready for everyday spending.
• Borrowing stablecoins keeps everything onchain and moves faster, but you’ll need to sell them for fiat if you want to use the funds outside the crypto world.

Either way, both options give you quick access to liquidity without selling your crypto.

Typically, only CeFi platforms like Ledn and Nexo can give you fiat currency loans directly.

Side note: A handful of platforms might also let you borrow other crypto assets – but that’s probably not what you’re reading this guide for.

Step 5: Choose How Much You Want To Borrow.

Here’s where you decide how much of your crypto’s value you want to borrow.

Every platform has a Loan-to-Value (LTV) limit – basically, how much you can borrow compared to your collateral.

Put simply, you can’t borrow the full value of your crypto. That buffer keeps the platform (and you) safe if prices drop.

Since crypto can swing like crazy, this margin helps prevent sudden liquidations. In other words, it prevents the platform from selling your collateral to make sure you can pay back your loan.

• Most platforms cap LTV around 80%. So if you want to borrow $4,000, you’d need about $5,000 or more in collateral.
• Higher LTV = higher risk and higher interest.
• Lower LTV = safer loan and cheaper rates.

Pro tip: Aim for 35% LTV or less – it gives you breathing room if the market dips hard.

Step 6: Finalize Your Loan & Pay Fees

Before you lock it in, take a minute to double-check everything – your collateral, loan amount, LTV, and any fees.

Once everything looks good, go ahead and hit submit.

• CeFi platforms might charge a small origination fee (a one-time setup cost).
• DeFi platforms usually only charge a gas fee to submit your loan onchain.

After that, your funds are sent straight to your wallet or bank account – and just like that, you’ve officially borrowed against your crypto!

Step 7: Manage Your Loan

Once your loan’s live, your main job is to keep tabs on your collateral.

After all, the whole reason you borrowed against your crypto was so you didn’t need to sell it, right?

Watch your Loan-to-Value (LTV) ratio, stick to a realistic repayment plan, and always leave a safety buffer in case the market dips.

Most platforms make this easy with dashboards, alerts, and options to add or withdraw collateral whenever needed.

This is where Ledn goes the extra mile.

It gives you automatic email alerts, an Auto Top-Up feature that protects you from sudden price drops, and handy tools for partial repayments or redeeming collateral when your LTV is low.

Step 8: Repay Your Loan (Optional)

These days, most borrowing platforms have a flexible loan duration with no expiry date.

Even if they do, they’ll likely let you extend it easily if your LTV is healthy.

Either way, if you want your crypto back, you’ll usually have to repay your loan one way or another.

Here’s how it usually works:

• Send back the borrowed asset (fiat or stablecoins), depending on what your platform supports.
• Interest adds up daily until the loan’s paid off.
• Most platforms skip early-payment penalties, but it’s worth checking.

Ledn keeps it simple. You can repay anytime with $BTC, $ETH, $USDC, or a good old wire transfer – all with no fees or penalties.

If your LTV drops below 30% after 60 days, you can even take back some of your collateral.

Want to keep your loan longer? Ledn lets you extend beyond 12 months as long as your LTV stays under 65%.

Pros And Cons Of Borrowing Against Your Crypto

Who Should Borrow Against Their Crypto?

Borrowing against your crypto isn’t for everyone – but for some, it’s a smart move.

Here’s who it fits best:

• HODLers who need cash without selling: If you’ve got $20K in Bitcoin but need $10K in cash, selling could mean triggering capital gains taxes – and missing out if BTC pumps later. A crypto loan gives you liquidity without losing your upside.
• People who like privacy and flexibility: No credit checks and no nosy bankers asking what the money’s for. You post your crypto, get your loan, and use it however you like.
• People who are crypto-rich, but cash-poor: If most of your net worth lives in crypto, a loan lets you tap into that value for real-world spending or opportunities – without dumping your stack.

Risks: CeFi Borrowing

Crypto-backed loans are useful, but like any power tool, they need handling with care.

Here’s what to watch out for if you’re using a centralized lender:

• Platform Trouble: Centralized lenders actually hold your crypto. If they go under or pause withdrawals, your funds could get stuck – and they’ll protect themselves first. Check their history and make sure they’re transparent with their business.
• Hacks: Big crypto lenders are juicy targets for hackers. Even if they’re insured, coverage usually doesn’t cover everything. Stick to platforms with strong security and public audit reports.
• Margin Calls & Liquidations: This goes for any lending platform – not just CeFi. If your collateral’s value drops, your LTV goes up. Hit the limit, and the platform can sell your crypto unless you add more fast.
• Rehypothecation: Rehypothewhat? Okay, last big word for today. In simple terms, some platforms reuse or lend out your collateral – if something goes wrong, that can put your crypto at risk. Look for ones that let you opt out or keep your funds isolated.

Pro tip: Stick with trusted names, keep your LTV low, and always read the fine print before handing over your crypto.

Risks: DeFi Borrowing

DeFi loans come with their own set of risks – different from CeFi.

The danger here isn’t someone mismanaging your funds, but rather the code, markets, or math turning against you.

Here’s what to watch out for:

• Hacks & Exploits: Smart contracts are public, which means hackers can study them for weak spots. If they find one, funds can vanish fast – entire pools have been drained in minutes. Aave even had to pause activity on the Harmony network after a $100M exploit.
• Smart Contract Bugs: This is kinda covered by the above point. But sometimes it doesn’t even take a hacker to do it – sometimes, things just break. Money can get stuck, or end up in the wrong place, especially in wild market conditions.
• Margin Calls & Liquidations: Ok, you got me – it’s the same one again. But seriously, crypto’s volatile. Keep your LTV low, your collateral high, and you’ll be less likely to have to face any liquidations.

Stick with well-audited platforms, use lower LTVs, and don’t deposit more than you can afford to lose.

Are There Fees For Crypto Loans?

Fees can sneak up on you like mosquitos at a summer BBQ.

The main ones to watch for in borrowing are network fees and origination fees.

• Network Fees: Also known as gas fees, these are the unavoidable costs of moving crypto or using smart contracts. On Ethereum, they can spike hard when traffic’s high, which sucks if you’re borrowing a small amount. Luckily, Layer 2s like Base or Arbitrum keep things much cheaper.
• Origination Fees: These are loan-specific setup fees, usually a flat rate or a small percentage of the loan amount. Not all platforms charge these, but make sure you do the math before you hit “Borrow.”

Other fees like deposit, withdrawal, or prepayment charges exist, but they’re less common.

Just make sure you always read the fine print – because in crypto, every percentage point counts.

To Sum It Up

When you’re short on cash but long on crypto, a crypto loans work to let you access the value of your crypto without selling your stack.

There’s usually no credit check, and you can use the loan proceeds for nearly any purpose.

But just like traditional loans, crypto loans bring some risks, with forced liquidations leading the list.

With some careful planning, though, you can borrow with lower costs compared to personal loans–and without all the pesky questions.

Frequently Asked Questions