NOTE: The crypto market crash in 2022 affected CoinLoan's liquidity, causing it to slash its daily withdrawal limit from $500,000 to $10,000. We recommend proceeding with caution while using CoinLoan.
Our Take on CoinLoan
The Bottom Line
The traditional banking system faces considerable competition from projects such as CoinLoan. These platforms allow their users to borrow, lend, and trade crypto and fiat with very few hassles. Furthermore, CoinLoan aims to compete with other similar projects by offering low fees and stable returns.
CoinLoan is a peer-to-peer crypto lending platform aiming to shake up the financial system. The project is described by its founders as a pure CeFi (Centralized Finance) platform that allows its users to easily take out crypto loans, earn interest, and trade. CoinLoan’s enjoyed good growth in 2021– it provided nearly 2,000% more loans than the previous year and enjoyed nearly 900% customer growth.
However, the crypto market crash in 2022 greatly affected its liquidity, causing it to slash its daily withdrawal limit from $500,000 to $10,000. All of these are impressive figures, but how well does it stack up against competitors offering similar services? In this article, we will look at how CoinLoan works and how regular crypto users can benefit from its services.
What is CoinLoan?
CoinLoan is a crypto lending platform that was founded in 2017 by Ales Faliushin and licensed in Estonia. Since its inception, the public goal of the platform has been to ease access to crypto borrowing and lending services while also providing all of the functionalities of a traditional crypto trading platform.
CoinLoan is not a DeFi (Decentralized Finance) platform. The project’s website, in fact, states that the team has made use of certain aspects related to decentralization but that it has also recognized its limitations. On the other hand, they believe that CeFi applications allow for better customer onboarding, improved security features, and greater resilience.
Peer-to-peer lending works by matching lenders of cryptocurrencies with those who desire to borrow crypto funds. CoinLoan is no different in that respect. The platform does not actually provide the funds offered for loans. Instead, it acts as an intermediary and determines the conditions under which lending and borrowing can take place.
In order to start earning interest, CoinLoan customers must deposit their crypto assets, and the interest rate depends on which tokens you deposit. You can also stake the platform’s native coin, CLT, to get discounted borrowing fees and higher interest rates.
Meanwhile, crypto borrowers can receive funding without a credit check. The maximum loan-to-value ratio CoinLoan supports is 70%, meaning you can borrow at most 70% of your collateral. The interest you’ll pay varies between 4.5% and 12.3%-- the higher the loan-to-value ratio, the higher the interest rate. Crypto loan term lengths are between 30 days and 36 months.
CoinLoan also includes an exchange where users can buy, sell & swap crypto assets using an order book system. Many of the most high-profile crypto coins are represented.
CoinLoan states that most of its features are available worldwide (including in the U.S. and Canada), but customers are asked to pass a KYC verification as a means to verify each user on the platform. The platform’s headquarters are in Tallinn, Estonia, and its services are licensed under The Estonia Financial Authority.
What CoinLoan Offers
CoinLoan is a CeFi platform that focuses on providing competitive market conditions for crypto lenders and borrowers. The centralization aspect means that the platform’s team assumes full responsibility and actively works to ensure better rates than its competitors. Besides this, CoinLoan also provides a number of other notable features, reviewed below:
As previously mentioned, CeFi and DeFi loans aren’t financed by the platforms themselves. Instead, CoinLoan works similarly to an intermediary that matches the needs of crypto lenders to those of borrowers.
When depositing assets to the platform, customers begin earning interest on a daily basis. Users can deposit cryptocurrencies and stablecoins, as well as fiat currencies. Here are the assets that CoinLoan supports for lending:
Euro, Pax dollar (PAX), Pound Sterling, Tether (USDT), USD Coin (USDC), Binance USD (BUSD), TrueUSD (TUSD), DAI, Ethereum (ETH), XRP, Bitcoin (BTC) Wrapped BTC (WBTC), Bitcoin Cash (BCH), Cardano (ADA), Stellar (XLM), Pax Gold (PAXG), Binance Coin (BNB), Litecoin, Chainlink (LINK), Polkadot (DOT), Monero (XMR), Solana (SOL), Maker (MKR).
Lenders earn compounded interest instead of a flat rate. Compounding means interest is earned based both on the initial principal of the loan, as well as the interest that has accumulated over the previous periods.
To utilize the lending function, users will need to pass the KYC verification. Once a user deposits funds to the account, they immediately begin accruing lending profits. The lent funds are used to fund customer loans, similar to bank savings, and part of the interest paid on those loans accounts for rewards paid back to the lender.
These yields accrue daily and are paid out in the customer’s account on the first day of each month. Users can withdraw their funds at almost any time, with the minimum deposit period being one single day. While CoinLoan’s lending system is, indeed, similar to the way that banks administer savings accounts, the CeFi protocol is much more profitable and involves less hassle on the customer’s end.
Currently, there aren’t very many cryptocurrencies available for lending, although the list may be growing. The most famous cryptocurrencies, BTC, ETH, or LTC, are covered. Stablecoins, fiat, and CLT staking are also made available. In total, there are 29 types of currencies available for lending.
CoinLoan, similarly to other DeFi and CeFi platforms, makes it easy to get a loan against your crypto. You must deposit crypto assets as collateral, and you can borrow up to 70% of the value of the collateral. For instance, if you deposit $10,000 worth of tokens, the maximum you can borrow against your deposit is $7,000. Note that the higher the loan-to-value ratio, the higher the interest rate.
The crypto assets users provide as collateral cannot be accessed until the loan has been paid back in full. CoinLoan utilizes funds provided by lenders and determines the conditions for the loans, such as the period, which varies from one to thirty-six months. Taking out a loan is a relatively simple process, unlike the process of working with a bank. The loan can be approved in just minutes, giving the customer access to the funds, unlike a bank loan which traditionally requires much more time and paperwork.
CoinLoan also makes it easy for its users to trade crypto coins and fiat. The platform and system are pretty straightforward, and even though there isn’t a wide selection of coins available, it is easy to trade using the platform.
In order to make a deposit, users will need to visit the My Wallet tab. From here, they can deposit funds from other cryptocurrency wallets. No fees are incurred for deposits, as well as crypto and fiat withdrawals.
Customers are encouraged to join the referral program and earn up to 0.2% of every exchange and loan amount in which their friend is involved.
CoinLoan also offers a variety of premium services related to borrowing, lending, and trading to its business customers. Borrowing rates for corporate customers start at 4.5% and there are no early repayment fees. Businesses can borrow over a dozen types of fiat and crypto assets.
How to Sign up For CoinLoan
Signing up for a CoinLoan account is a simple process. Here’s what you need to do to get started:
Step 1: Visit the CoinLoan account and click Sign Up from the upper right corner.
Step 2: You will need to input your email and set up a secure password.
Step 3: Check the verification email and confirm the code that you’ve been provided.
Step 4: Once logged into your account, you will need to complete the KYC process.
Step 5: Once fully verified you should be all set to lend, borrow, or trade using CoinLoan’s features.
CoinLoan Pros and Cons
- Supports both fiat and crypto loans
- No fees for deposits and withdrawals
- Easy to use
- $10,000 daily withdrawal limit
- High collateral level required when borrowing funds
- Charges a loan origination fee (1% of principal amount)
- USD is not available for loans
When searching about CoinLoan online, potential users will likely find a lot of positive information. Indeed, its features make it an accomplished lending and borrowing platform. Let’s look at some of the highlights of the platform:
Customers Can Always Access Their Funds
Unlike other platforms, deposited funds are not locked up for a period of time longer than one day. This means that users can always access their funds and quickly withdraw them from the platform as desired.
No Fees For Deposits and Withdrawals
CoinLoan is also an attractive platform because of the fact that it does not charge any fees for either deposits or withdrawals of both crypto and fiat. This means that customers can enjoy CoinLoan’s benefits while easily transferring funds if a better opportunity becomes available.
Staking CLT is Not a Requirement for Yields
CoinLoan looks to promote its native token, CLT, and support its current valuation. It does this, in part, through its staking features. Still, customers can earn a yield on their regular deposits without being required to also deposit CLT.
While CoinLoan has generally been well received since being launched, it is worth considering some of the negative aspects of using the platform in order to get a complete understanding of its services.
High LTV Rate
The loan-to-value rate expresses the ratio between the loan and the value of the collateral. The LTV will determine the value of the interest rate. For example, the highest advertised rate of 12.3% corresponds to a 70% LTV. Overall, the LTV ranges between 20% and 70%.
Charges Loan Borrowing Fee
While CoinLoan does not charge fees for depositing and withdrawing funds, it will charge a 1% origination fee for borrowing, which will be discounted up to 50% if paid in the form of CoinLoan Tokens (CLT).
USD is Not Available For Loans
As mentioned, CoinLoan features a number of cryptocurrencies and fiat. However, users hoping to receive the USD on their loans will be disappointed. They can, however, opt to receive USDC, a stablecoin pegged to the USD.
Who CoinLoan is Best For
CoinLoan promises to be a relatively versatile platform within the CeFi space. Some of the crypto users that can best utilize its potential include
- Crypto users in need of funds who can benefit from the hassle-free loan options.
- Experienced users looking for yield opportunities who can take advantage of the lack of fees involved in making deposits and withdrawals.
- Companies who can benefit from the premium features provided to business accounts (rates starting at 4.5%, 15 assets to borrow etc.)
Cryptos Listed on CoinLoan
While CoinLoan does not include a massive list of cryptocurrencies, the majority of the most famous ones are represented, and depositing them can provide healthy rewards. Some current examples include:
- Bitcoin (BTC): 5.2% APY
- Ethereum (ETH): 5.2% APY
- Litecoin (LTC): 5.2% APY
- USDC: 10.3% APY
Fees for Using CoinLoan
Crypto users will be used to paying a number of fees when using a crypto exchange, or CeFi services. Overall, CoinLoan avoids charging many of the typical fees, such as deposit and withdrawal fees. Still, there are fees, such as the borrowing fee and the liquidation fees, that should be considered. Here are some examples of the costs:
|Minimum deposit||Varies for the different assets|
|Borrowing fee||1% of the loan principal amount|
|Liquidation fee||7% of the liquidated loan collateral|
Alternatives to Consider
Naturally, CoinLoan is battling in a segment of the crypto space that is populated by numerous similar financial services. Let’s now take a quick look at some of the companies you may want to consider as viable alternatives:
Nexo is another alternative to CoinLoan. You can earn annual interest of up to 16% on nearly three-dozen cryptocurrencies. Nexo has a $775 million insurance policy covering users' deposits, compared to $100 million for CoinLoan. However, don’t be too worried about CoinLoan– Nexo has many more users, so it needs a bigger insurance policy.
On the borrowing side, Nexo provides loans denominated in over 40 fiat currencies and two stablecoins, USDT and USDC. It lets users borrow up to 90% of the value of their collateral, compared to CoinLoan’s 70%. There are no withdrawal or deposit fees for Nexo users.
Check out our full Nexo review
YouHodler lets users deposit assets and earn up to 8.3% annual interest on them, considerably lower than CoinLoan’s 12.3%. This platform allows users to earn interest via staking, a feature CoinLoan doesn’t offer.
On the borrowing side, YouHolder lets users get loans of up to 90% of the value of their collateral, compared to CoinLoan’s 70%. It offers a wider range of crypto and fiat assets than CoinLoan.
CoinLoan also features a native token, CLT. This operates on the Ethereum blockchain network and uses the ERC-20 standard. Its role is to facilitate the payment of fees for lending and borrowing on the platform. CoinLoan incentivizes users to stake its native token by offering discounts on borrowing fees and better interest rates.
When CLT is provided as collateral, the platform determines the maximum loan amount that can be covered by using the market value of the token with an 80% loan-to-value ratio.
CLT coins have a fixed supply of 22 million units, and 15 million of these were distributed during the ICO phase of 2017. An additional 2 million were offered to the team and the project’s advisors, and 5 million were distributed pre-ICO.
Is CoinLoan Right For You?
CoinLoan can be an excellent tool for newer and intermediate-level crypto users who are looking for additional methods to utilize their assets and the opportunities provided by the crypto space. The lending, borrowing, and trade features are straightforward and easily accessible by all.
While CoinLoan has numerous rivals, some of its features are recommended as a good solution for both novice and intermediate crypto users. The platform’s policy of offering collateralized loans quickly, without a credit check, will be of use to many crypto users. Furthermore, crypto investors can earn a healthy amount of yield by depositing funds into the platform, which they can withdraw at any time, and for no additional fees.
Final Thoughts on CoinLoan
CoinLoan is one of the many services that is looking to compete with the traditional banking system. Unlike it, however, the process of lending and borrowing funds, in crypto or fiat, is made much more straightforward and free of the headaches with which users will have grown accustomed. All of these traits make CoinLoan an important platform within the CeFi space.
Frequently Asked Questions
Is CoinLoan Regulated?Expand to learn more
CoinLoan is a company based out of Tallinn which is regulated under the Estonia Financial Authority.
Is CoinLoan Available in The USA?Expand to learn more
CoinLoan is available in more than 150 countries, including the USA.
How Do I Get a Loan From CoinLoan?Expand to learn more
Getting a crypto or fiat loan from CoinLoan is a simple process that starts by signing up, passing the KYC verification, and providing the required collateral.
Where is CoinLoan Located?Expand to learn more
CoinLoan is headquartered in Northern Europe in Tallinn, Estonia.
What is The CoinLoan Withdrawal Limit?Expand to learn more
CoinLoan has a daily withdrawal limit of up to $10,000 for each account.
Does CoinLoan report to the IRS?Expand to learn more
Yes, CoinLoan provides a tool to generate tax reports that you can submit to the IRS.