Best Bitcoin Loan Rates In 2025: Comparing Leading Providers

Secure the best Bitcoin loan rates in 2025. Understand the influencing factors and make smart decisions when accessing liquidity using your BTC as collateral. 

January 2024 interest rates

These rates are constantly adjusted. For an in-depth dive into each of these platforms, check out our guide to the best crypto loan platforms.

How To Get The Best Bitcoin Loan Rates In 2025

You’ll need to do some research and preparation to get the best rates. Here are some steps to help you sort through the options and choose the right loan for you.

Step 1: Research Bitcoin Loan Platforms

Bitcoin loan platforms differ significantly in their features, lending models, and terms. Start your research by looking into the following key areas:

Lending Models

Collateral-Based Models: Platforms that require higher collateral often provide more stable rates and reduced volatility.

Liquidity-Focused Models: These platforms prioritize lending liquidity, offering competitive rates while balancing risk mitigation strategies.

Platform Features

Loan-to-Value (LTV) Ratios: Determine how much collateral is needed and assess the trade-offs between higher collateral and lower interest rates.

Special Features: Some platforms provide benefits such as multi-currency support, interest-only repayments, or automatic collateral adjustments during market changes.

Platform Reviews and Comparisons

Our blog, 15 Best Crypto Loan Platforms in 2025, offers in-depth comparisons of leading platforms. Trustpilot is another good resource here.

Step 2: Evaluate Loan Terms and Conditions

Once you’ve shortlisted platforms, look into their terms to find the best match. Key factors include:

Interest Rates

Compare rates across platforms to identify those offering the most competitive terms without compromising transparency.

Track Record and Reliability

Research the platform’s history of protecting client assets and managing risk effectively.

Security and Storage

Ensure platforms employ robust security measures, such as cold storage, encryption, and regular audits to safeguard your collateral.

Repayment Flexibility

Check whether platforms allow early repayments without penalties or offer flexible terms that match your financial situation.

Customer Support

Opt for platforms with accessible and reliable support to address any issues promptly.

Step 3: Understand What Affects Bitcoin Loan Rates in 2025

Knowing what influences Bitcoin loan rates can help you secure more favorable terms. Consider these factors:

Loan Duration

Short-term loans generally have lower rates. Match the duration to your repayment capacity and financial goals.

Loan Amount

Larger loans may incur higher rates due to increased risk. Borrow only what you need to avoid unnecessary costs.

Market Conditions

Bitcoin’s price volatility impacts loan rates. Aim to borrow during stable market periods to minimise rate fluctuations.

Platform Fees

Assess all fees, including origination, maintenance, and withdrawal fees, to calculate the total cost of borrowing.

Credit Checks and Application Processes

While some platforms perform credit checks, others (like Ledn) have an accessible model. With Ledn Loans, you only need a minimum of $1,000 USD equivalent in BTC collateral, and you are automatically approved without any further credit checks required.

Step 4: Maximize Your Savings with Strategic Borrowing

Compare Platforms Regularly

Stay updated on changes in existing platforms’ policies to find the most competitive options.

Maintain Adequate Collateral

A strong collateral position lowers the risk of liquidation and may qualify you for reduced rates.

Use Platform Tools

Many platforms provide calculators and simulation tools to help you evaluate potential loan scenarios and identify cost-effective options.

What is a Bitcoin loan?

A Bitcoin-backed loan is a way to borrow money using your Bitcoin as collateral. 

These loans allow you to benefit from the value of your Bitcoin holdings without selling them. Instead, you deposit your crypto into a lending platform or service, which then provides you with a loan in your desired currency. The loan amount is determined by the value of your Bitcoin collateral.

Read more: How to Borrow Against Crypto - Decoding Crypto Loans 

How Do Bitcoin Loans Work?

Bitcoin loans use your Bitcoin as collateral. You deposit your Bitcoin into a lending platform, and in return, you receive a loan in fiat currency or stablecoins, usually within a day, or less. The loan amount is determined by the value of your Bitcoin collateral. 

You can do anything you like with the loan funds. Once you repay the loan over time, plus the interest, you get your Bitcoin back. In the event of non-payment, lenders can liquidate the collateral to recover their funds. 

The Case for Bitcoin Loans

There are several reason why you’d want to take out a Bitcoin loan:

They’re fast 

Bitcoin-backed loans offer fast approval and processing times, allowing you to access funds when you need them. For example, Ledn’s B2X Loans are instant, and their Bitcoin-Backed Dollar Loans are typically funded within 24 hours of approval. Loan terms can be as short as seven days, or longer than a year. 

No need for credit checks

Unlike traditional loans, Bitcoin loans typically don't require a credit check. Your collateral is the key factor in securing the loan. As a result, people who might not be able to take out traditional loans can use them to access cash. 

Rates tend to be better

Crypto-backed loans require borrowers to provide crypto collateral, which sets them apart unsecured loans. This collateral requirement creates the relatively low interest rates associated with crypto-backed loans, so you’ll pay less interest than you would with high-interest options like payday loans or credit cards. This means you can potentially save on borrowing costs.

One way this happens is through Rehypothecation.

Rehypothecation is when platforms institutionally lend out loan collateral in order to generate income. This can potentially lower borrowing costs. It is done by both centralized crypto lending platforms and traditional lenders like banks.

Some crypto platforms use this income to subsidize loan interest rates. It also enables lenders to retain exposure to potential price appreciation in the cryptocurrency market while still using the borrowed funds for other purposes, such as investments, expenses, or leveraging trading strategies.

Platforms that keep collateral in cold storage tend to charge higher interest rates.

Ensure that the platform you choose has strong risk management and due diligence policies. If the value of the collateral significantly declines during the loan term, borrowers may face a margin call, requiring them to add additional collateral to maintain the required loan-to-value (LTV) ratio. Or, their collateral may be liquidated to pay out the loan outstanding balance upon reaching a certain LTV.

Ledn engages in institutional lending in order to subsidize client borrowing rates. It carefully manages risks and conducts thorough due diligence on all institutional lenders.  It’s also fully transparent in how it uses platform assets via monthly Open Book Reports and the Client Dashboard.

Related content: Proof of Reserves in Crypto, Explained

They’re globally accessible

Bitcoin loans transcend geographical boundaries. You can apply for a loan from anywhere in the world, as long as you have an internet connection. This global accessibility makes it easier for individuals in underserved or underbanked regions to access funds.

They’re private

Bitcoin loans offer a greater level of privacy compared to traditional loans. While traditional loans require extensive personal and financial information, Bitcoin loans often only require your Bitcoin collateral. This helps protect your privacy and personal data.

You can keep your assets

Taking out a Bitcoin loan allows you to keep your Bitcoin holdings while still accessing cash. As a result, you can explore other investment opportunities or meet financial obligations without sacrificing your long-term crypto investments.

Types of Bitcoin Loans Available

There are different types of Bitcoin loans available. Let's take a closer look at two popular options:

Bitcoin-backed Loans

These loans use Bitcoin as collateral. You deposit your Bitcoin, and based on its value, you can borrow funds.

B2x Loans

B2x Loans are a Ledn exclusive product that allow you to borrow against your Bitcoin to buy more bitcoin. They combine a Ledn Bitcoin-backed Loan with the purchase of an equal amount of Bitcoin. When the loan is repaid, both the collateral and the newly purchased BTC are returned to you.

FAQS

What is a Bitcoin loan?

A Bitcoin loan is a way to borrow money using your Bitcoin as collateral. These loans allow you to access funds without selling your Bitcoin. You deposit your crypto into a lending platform, which provides you with a loan in your desired currency. The loan amount is based on the value of your Bitcoin collateral.

How Do Bitcoin Loans Work?

Bitcoin loans use your Bitcoin as collateral. After depositing your Bitcoin into a lending platform, you receive a loan in fiat currency or stablecoins. The loan amount is determined by the value of your collateral. Once you repay the loan, plus interest, your Bitcoin is returned to you. If you don’t repay, the collateral may be liquidated.

Can I Use a Bitcoin Loan to Buy More Bitcoin?

Yes, some platforms, like Ledn, offer products like B2X loans. These combine a Bitcoin-backed loan with the purchase of additional Bitcoin. Learn more about Ledn’s B2X loans here.

How Do Interest Rates for Bitcoin Loans Compare to Traditional Loans?

Bitcoin loans often have competitive rates due to the use of collateral, which reduces risk for lenders. Rates vary by platform and market conditions but are generally lower than unsecured loans like credit cards or payday loans.

Conclusion

Bitcoin loans offer convenience, potential savings, and a quick way to access funds. To secure the best Bitcoin loan rates in 2025, take the time to explore your options, choose the right platform, and consider the factors that affect loan rates.

Sponsored by 21 Technologies Inc. and its affiliates (“Ledn”). All reviews and opinions expressed are based on my personal views.