Coinloan review  – Is CoinLoan Safe & Legit?
Having your crypto-cake and eating as well is possible thanks to a rapid rise of crypto-based loan services such Coinloan. With Coinloan (and its competitors, some of which we mention below), you can store your coins on the crypto lending platform’s wallet and earn a completely passive income through interest rates.
Or, you can use your crypto as collateral and borrow some money without needing to sell your precious coins.
Since Bitcoin is not only a currency but a whole financial ecosystem in itself, it was only logical that all traditional institutions like banks and lenders will get their crypto match as well.
Today, we will explain the nature of Bitcoin lending and review one of the major players of crypto lending, Coinloan.
|Products||Cryptocurrency interest accounts and loans|
|Fees for lenders||None|
|Fees for borrowers||Varies|
|Deposit by credit card||Yes|
|Time to receive loan:||Instantly|
|Accepted fiat currencies||USD, EUR, GBP, RUB|
|Accepted cryptocurrencies||BTC, BCH, ETH, LTC, XMR or stablecoins TUSD, USDC, PAX, DAI, USDT|
|Platform founding year||2016|
|Minimal investment||€100 or equivalent|
|Estimated annual returns||Up to 12%|
|Loan security||Backed by crypto assets|
|Country of regulation||Estonian Financial Supervision Authority|
|Licence||European Financial Licences:|
FVR000111, FRK000091, FFA000241
Established in 2017. CoinLoan is a Peer-to-Peer lending service that utilises cryptocurrency as collateral. What separates CoinLoan from other lending services is their mission to combine their lending services with a currency exchange, meaning you can exchange your currencies and withdraw funds without having to transfer them from the lending platform and incur a load of extra steps and fees.
How the Platform Works
In short, CoinLoan works by providing people in need of finance with money from third-party investors.
Investors will sign-up to CoinLoan and deposit either fiat currencies or cryptocurrencies into their Interest account, from here they will earn interest every month. This money is then used by CoinLoan to finance loans for borrowers. These borrowers use their cryptocurrency holdings as collateral in order to secure the loans. Once the loan is paid back, the borrower receives their cryptocurrency that they previously pledged.
What Are Crypto Loans (Bitcoin Lending)?
Crypto loans are another form of investment for those in the cryptocurrency space. Investors or “Lenders” will supply borrowers with fiat currency or cryptocurrency, either through the use of a third party or just straight to the borrower. The borrower will supply the lender with cryptocurrency as collateral for their loan, this way the Lender can use the cryptocurrency to pay themself should the borrower not repay the loan. The borrower pays back the loan with interest which is how investors earn their money.
What is Crypto (Bitcoin) P2P Lending?
Peer to Peer lending is a system in which an individual becomes a “lender”. These users receive interest on their money as it is supplied to borrowers who pay back with interest. This interest is then split between the middleman and the lender.
P2P marketplaces and websites bring together people and entities who need finance, and those who are looking to make interest on their money. On some website and services, the lender themselves decides who their money goes too, though in most cases it is spread out at the website’s discretion.
These services are beneficial to lenders and borrowers as those seeking interest on their money can earn more than a traditional interest account. And those in need of short-term finance have a quick alternative to traditional methods.
The difference between typical P2P lending and crypto P2P lending is that in order to secure their loans, borrowers must submit an amount of cryptocurrency to receive their money. This is a popular choice for borrowers as they don’t want to sacrifice their cryptocurrency investments in order to stay afloat.
CoinLoan Main Features
CoinLoan features three main services.
✅ The first of these services is lending people money. People in need of finance are able to lock up their cryptocurrency in exchange for short-term finance, these loans can we worth as much as 70% LTV and are a great way for people to quickly access the financial power of their cryptocurrency.
✅ The second is their Interest account. This is where investors can deposit savings in order to earn a monthly interest. The website pays this interest to investors using the interest they earn on the loans they have given out. Investors can also earn money by creating loan requests that people can make use of, though your funds aren’t withdrawable till the loan has been paid off.
✅ Lastly, CoinLoan allows you to exchange your coins for others, negating the need for you to visit an exchange when changing your coins, this means you can limit fees and keep investing your currency.
Types of investments available at CoinLoan
There are two types of investment available at CoinLoan, these are the interest account and through creating your own individual loan offers.
The interest account is quite simple, you deposit your coins or fiat currencies and gain a fixed interest rate every month, this rate is dependent on the currency. These can then be withdrawn at any time.
The other kind is to create individual loan requests which will then be fulfilled by borrowers, these can be a bit more confusing, though you will not have to do any verifying yourself, making the process still rather simple. You will have to wait for the loan to be paid before you can withdraw though.
Using Coinloan as a Borrower
Most people will come upon a point where they suffer from financial hardship, and some of these people will be cryptocurrency users and investors who would normally have to sell their coins in order to make ends meet. This can be hard for a lot of people as they have an attachment to their coins and believe if they sell them, they will miss out on price increases and other financially beneficial events attached to them.
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How CoinLoan fixes this issue is by letting borrowers take out a loan using their cryptocurrency as collateral. This way, the investor can get the help necessary to support themself and their family, whilst not losing out on their investment as it will be returned to them once the loan repayment is fulfilled.
Another very large issue faced by borrowers is their credit score, a bad credit score is often the decider between whether or not a borrower will be eligible for finance. CoinLoan does not require your credit score at all! By utilising a 70% LTV ratio, they are confident that they will have their loans paid back, meaning they have faith in their borrowers so long as they submit the collateral they’ve agreed upon and fulfil KYC verification.
CoinLoan supports quite a wide array of cryptocurrencies considering the service that it offers. When depositing your coins into the Interest Account make sure you view the interest rate as it differs between coins.
CoinLoan supports Bitcoin, Monero, Wrapped Bitcoin, Litecoin, Chainlink, Bitcoin Cash, Ethereum, Ripple and Pax Gold. CoinLoan also supports a range of stable coins, these are USD Coin, Binance USD, Dai, TrueUSD, Tether and Paxos.
As a borrower, CoinLoan issues loans with an interest rate with as low as 4.5%. This is a rather low rate for a short-term loan, especially as CoinLoan does not require a good credit score in order to issue you finance. The interest rate change is in accordance with the LTV of the loan.
How are my Coinloan Funds Paid?
Your coinloan funds are paid back to you in whatever currency you used to enter them. Meaning if you are earning interest on Bitcoin, it will be repaid in Bitcoin.
LTV Risks and Falling Behind on Repayments
In order to ensure security of investor’s funds, CoinLoan operates at a 70% LTV ratio. This means that in order to take out a loan, your “collateral” or the Bitcoin that you give to CoinLoan in order to receive the loan, must be worth at least 30% of the total value of the loan. This helps to incentivise repayment from borrowers as they don’t want to lose their cryptocurrency, if they fail to repay then that collateral may be used in order to pay the investor/lender.
Using Coinloan as an Investor
Step 1: Open an Account and Confirm Your Identity
The first step to investing your coins on CoinLoan is creating an account. To do this, simply click on the sign-up button on the top left of the screen and begin filling out the information. This should be fairly straight-forward as Coinloan aims to make the user experience as easy as possible.
⚡️ Step 2: Deposit Funds
The next step is to deposit your funds on to the site. To do this, find the tab which reads “Interest Account” and select the coin you wish to deposit. Send your coins to the address on screen and begin earning interest on your coins!
It is also possible to create individual loan offers though this can be a slower method of lending.
⚡️ Step 3: Earn interest on your coins through the “Interest Account” or Loan
Once your coins are deposited in CoinLoan’s “interest account”, they will begin to earn interest on the 1st of every month, though your funds are retrievable at any time. Once you are satisfied with your earnings you can retrieve them free of fees and time restrictions!
When it is through a loan offer, you must wait till your coins have been paid to you for you to withdraw them.
⚡️ Step 4: Withdraw your coins
Simply select the withdraw option to withdraw your coins and enjoy the interest you’ve earned!
Coinloan Interest Account
The CoinLoan interest Account is where investors deposit their fiat currencies and cryptocurrencies in order to earn interest on them. The Interest account pays out its interest to investors on the first of every month, without fail. CoinLoan is responsible for the repayment of the loans and therefor all you have to do is sit-back and let your interest accumulate.
By purchasing and then staking CoinLoan’s token (CLT) you are able to earn higher interest on your coins, up to a 2% increase.
Is CoinLoan Safe/Legit?
CoinLoan has a great array of security features which ensure the safety of your funds. In order to make sure that your coins are inaccessible to hackers, they make use of two factor authentication, cold storage wallets, a protected infrastructure, biometric security and more. By utilising these protocols and operating with such a high level of precaution, they are able to effectively protect the funds from attack.
CoinLoan promises to pay lenders their interest regardless of the results of the loans their money is used to fund. This is because CoinLoan uses investor finance as it chooses and is therefore responsible for whether or not you see your money again, this means that you can rest assured that the recurring interest will be deposited into your account each and every month without fail.
CoinLoan is licensed under the Estonia Financial Authority, making it a licensed financial institution. This means that CoinLoan must abide by KYC (Know Your Customer) regulations and other procedures in order to ensure they are in compliance with European and other international legislation and regulations.
Who owns the platform?
CoinLoan was founded in 2017, when business partners Alex Faliushin and Max Sapelov wanted to create a way to access the financial value of cryptocurrency assets in times of needs, without having to sacrifice your holdings. From this idea, CoinLoan was born.
CoinLoan is operated under the legal title “ExFinance OÜ” and registered in Estonia.
Co-Founder and CEO of CoinLoan, Alex Faliushin, is currently responsible for the running of Coinloan.
How Fast Can You Withdraw Your Money from CoinLoan?
When using the Interest account, CoinLoan lets investors withdraw their money at any time, meaning you can instantly take back your funds for another use in case of an emergency. It is worth noting though that interest accumulates on the first of every month, so you may want to try and time your departure from the service in time with this to get the most out of your money.
If you are offering individual loans, then these must be paid back for you to receive the funds. This makes them a riskier option as you run the risk of there being problems with repayment.
CoinLoan Review Summary
In conclusion, CoinLoan is a platform that has made it its mission to provide an easy-to-understand place where cryptocurrency investors can store their coins and gain a high interest on them, without any of the hassle that comes with exchanges and fees etc, and a place where those in need of financial help can seek out a loan to help them through tough times, without havering to sacrifice their investments.
CoinLoan has certainly achieved its mission, with interest rates higher than bank’s savings accounts, the ability to use a multitude of different currencies, including cryptocurrency and fiat currencies, along with a silky-smooth user layout which can help guide you through the process, no-matter your level of cryptocurrency experience.
Blockfi is, of course, the leading crypto loans platform and surely the top alternative to Coinloan.
Take a look at our head to head battle of Blockfi vs Nexo vs YouHodler.
Why choose CoinLoan?
CoinLoan is a great choice for both borrowers and lenders alike.
Borrowers have access to loans at a great interest rate and without any credit score checks. This gives access to money that a lot of people wouldn’t be able to acquire without one.
CoinLoan is great for its investors too, their offering of a fixed high interest rate is already a great reason to invest, this is then backed up by the fact they are a licensed financial institution. They generate a loan agreement that is acceptable by banking and tax services, making it much easier to verify financially. They also offer worldwide coverage letting people who are sometimes with limited options to participate. Lastly, they are the only platform that offers Crypto-to-Crypto loans, as no other providers will let you borrow cryptocurrency, against cryptocurrency.
Is my Money Safe at Coinloan?
CoinLoan utilises a vast number of security functions to keep both your finances and data secure, they also use high LTV values with the riskiest being 70%, this ensures that they have enough security within their loans to make sure they can pay investors back.
Does CoinLoan offer a buyback guarantee?
CoinLoan unfortunately does not offer a buyback guarantee though don’t let this stop you. As their loans are secured by crypto assets, there should be no need for a loan to be bought back when using an interest account.
What kind of loans do investors invest in on CoinLoan?
Investors on CoinLoan invest in a range of loans that can reach up to 3 years in length. CoinLoan will only take on loans with an LTV no higher than 70%. This helps to ensure that investors’ money is secure.
How does CoinLoan guarantee returns?
CoinLoan only loans to borrowers offering no more than an LTV of 70%. Through using such a high amount of cryptocurrency as collateral, it drives away potential scammers and helps them to cover their losses in the case of a loan being defaulted on. Through these methods, CoinLoan is able to guarantee returns.
Is there a secondary market on CoinLoan?
There is no secondary market on CoinLoan.
How much can you earn on CoinLoan?
With the interest account you will earn a fixed yearly rate. Depending on your financial contribution and currency deposited, you can earn up to 10.3% APY! This is much more than most savings accounts and banks you often offer a measly 1-2% in return for your hard-earned money.
Annual return on Fiat currencies
On a number of fiat currencies, including the Euro and the Great British Pound, you can earn up to 10.3% APY. The starting return is 8.3% which is already a great amount of interest. Although the US Dollar is not directly usable for earning interest, you can use cryptocurrencies tied with the dollar to invest at this rate, such as USDT (Tether). In order to increase your yearly interest to 10.3% you will need to purchase a number of CoinLoan tokens, also known as CLT. Once you have acquired 125 CoinLoan Tokens you will start earning higher interest, this scales up to 2,500 CoinLoan Tokens at which you will earn the extra 2% interest, resulting in 10.3% annually.
Annual return on cryptocurrencies
Although the interest isn’t as high on the cryptocurrency options as it is on the fiat options, it is still notable due to it beating bank interest rates with ease, accompanied by the fact that Bitcoin and other cryptocurrencies are known to increase dramatically on their own. The base rates for interest on cryptocurrencies start at 3% APY for Monero, though most cryptocurrencies supported, including Bitcoin, start at a base APY of 5.2%. Identical to the Fiat currencies, purchasing up to 2500 of CoinLoan’s Coin Loan Token, will grant you rewards all the way up to 2% more APY, bringing the yearly interest rate to 7.2%.
Who can invest in CoinLoan?
All this talk of collateral, interest rates and lending your money to strangers on the internet may seem like an unusual concept reserved for experienced crypto users though this is simply not the case with CoinLoan. As stated earlier, CoinLoan’s mission is to create a space where people can deposit their currencies, cryptocurrency or not, and then earn an income from said coins, all without leaving that one space. Not only have they made their service incredibly simple by doing this, but they have also put time and effort into making their business user friendly, explaining how each service works, how it is protected and how you will be repaid.
Unlike other financial services who will hide extra fees and mystify their interest rates, CoinLoan offers a clear and concise explanation on how much you can expect to earn, when you will earn it, and how you can earn more! On top of all this simplicity, they are able to pay you an interest-rate much higher than most.
Anyone can invest with CoinLoan, as long as they reach the minimum deposit, which is around 100 USD for stable coins and fiat currencies.
- Loans are secured by LTVs of at least 70% at most
- High interest rates on investments, better than banks
- Supports a wide range of currencies
- Easy to use and understandable
- Lets you exchange currencies on the site
- Minimum deposit for investors
- Doesn’t directly support the USD as a fiat currency.
- No Buyback guarantee
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com