{"id":2984,"date":"2021-05-24T15:15:04","date_gmt":"2021-05-24T15:15:04","guid":{"rendered":"https:\/\/icoholder.com\/blog\/?p=2984"},"modified":"2025-05-12T18:44:23","modified_gmt":"2025-05-12T18:44:23","slug":"crypto-vs-conventional-loans-key-differences-explained","status":"publish","type":"post","link":"https:\/\/icoholder.com\/blog\/crypto-vs-conventional-loans-key-differences-explained\/","title":{"rendered":"Crypto vs Conventional Loans: Key Differences Explained"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/icoholder.com\/blog\/crypto-vs-conventional-loans-key-differences-explained\/#Crypto_loans_vs_conventional_loans\" >Crypto loans vs conventional loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/icoholder.com\/blog\/crypto-vs-conventional-loans-key-differences-explained\/#Lucrative_for_lenders\" >Lucrative for lenders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/icoholder.com\/blog\/crypto-vs-conventional-loans-key-differences-explained\/#Borrowers_in_the_driving_seat\" >Borrowers in the driving seat<\/a><\/li><\/ul><\/nav><\/div>\n<p data-pm-slice=\"1 1 []\">2021 has been a landmark year for cryptocurrency so far, with the rise of crypto vs conventional loans being one of the most significant developments. In January, the combined market value of all crypto assets across the world <a href=\"https:\/\/qz.com\/1954555\/all-the-worlds-crypto-is-now-worth-more-than-1-trillion\/\">exceeded $1 trillion<\/a> for the first time, becoming equivalent to the fifth most circulated currency in existence.<\/p>\n<p>But whereas any value from holding cryptocurrency has generally sprung from buying low, holding on to the stock as its worth appreciates and then selling it on for a profit, the advent of lending in the sector has introduced the concept of <a href=\"https:\/\/smartcredit.io\/crypto-lending\/\">crypto interest<\/a>. Crypto loans are similar to traditional loans but differ in key ways. These differences lead to better outcomes for everyone involved.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Crypto_loans_vs_conventional_loans\"><\/span>Crypto loans vs conventional loans<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-pm-slice=\"1 1 []\">Traditionally, to borrow from a bank, a person must submit a loan application. This includes proof of a good credit history and collateral for the loan. The borrower then pays interest over the loan\u2019s duration, often ending up paying more than the original loan amount.<\/p>\n<p>Crypto loans work similarly but without banks. Instead, they use crypto lending platforms. Lenders are directly connected to borrowers. The profit from the interest goes straight to the lender, with the platform taking a small fee.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Lucrative_for_lenders\"><\/span>Lucrative for lenders<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>By cutting out the middlemen of banks, the non-custodial set-up of<a href=\"https:\/\/icoholder.com\/blog\/stratis-cryptocurrency\/\"> certain crypto<\/a> loan platforms means that only the borrower and the lender have access to the assets in question. This means that rather than taking the tiny percentages of below 1% that are being offered by most high street banks on their current and savings accounts, lenders can take the lion\u2019s share of the profits.<\/p>\n<p>What\u2019s more, those profits themselves are far higher than they are in the non-crypto world. The unique arrangement of the crypto loan system means that interest rates can be many times higher than with fiat currencies, including earnings of up to 15%. That\u2019s considerably more than any comparable market on the product these days, which is why crypto lending is becoming <a href=\"https:\/\/www.coindesk.com\/heres-why-interest-rates-on-cryptocurrencies-could-be-a-game-changer\">increasingly popular<\/a> as a method of passive income for investors.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Borrowers_in_the_driving_seat\"><\/span>Borrowers in the driving seat<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-pm-slice=\"1 1 []\">Borrowers also benefit from crypto loans. They can take advantage of low collateral ratios and a wide range of collateral options. Providers like SmartCredit.io offer access to finance that would otherwise be unavailable. Unlike traditional loans, there\u2019s no credit check, and borrowers can set their own terms.<\/p>\n<p>Crypto loan transactions are processed digitally, making them faster than traditional loans. Blockchain technology ensures these transactions are secure, preventing fraud or theft.<\/p>\n<p>While crypto loans carry interest, this is an advantage. Borrowers get access to a wider range of options quickly. Lenders can earn passive income without intermediaries taking a cut.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>2021 has been a landmark year for cryptocurrency so far, with the rise of crypto vs conventional loans being one of the most significant developments. &hellip; <\/p>\n","protected":false},"author":14,"featured_media":2985,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-2984","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Crypto vs Conventional Loans: Key Differences Explained<\/title>\n<meta name=\"description\" content=\"Discover how crypto vs conventional loans differ, with higher returns and faster processes in crypto lending - IcoHolder.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/icoholder.com\/blog\/crypto-vs-conventional-loans-key-differences-explained\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Crypto vs Conventional Loans: Key Differences Explained\" \/>\n<meta property=\"og:description\" content=\"Discover how crypto vs conventional loans differ, with higher returns and faster processes in crypto lending - 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