Best Crypto Loans in Australia in 2025

Cryptocurrency lending can feel daunting, especially with so many platforms and options available in Australia, each offering different deals with various interest rates and loan terms. This can be confusing, even to those who aren’t new to the industry. To make matters clearer, we'll take you through some of the best options for crypto loans available to Australian citizens.

What is a Crypto Loan?

A crypto loan is when you borrow money or cryptocurrency based on the value of a digital asset used as security. Otherwise known as collateral, this can be any type of cryptocurrency, depending on what the lender accepts. 

Read more: The Ultimate Guide To Crypto Lending - Everything You Need To Know

How Crypto Loans Work in Australia

Loans for crypto assets in Australia are overseen by the Australian Securities and Investments Commission (ASIC). This is the regulatory equivalent to the SEC in the US, or the FCA in the UK. They require any crypto lending service to have an Australian Financial Services license, or in some circumstances a credit license. Of course, this is only relevant when looking at centralized lenders, as decentralized services tend not to get covered in regulatory settings. When it comes to tax on crypto, this is overseen by the Australian Taxation Office. The country treats crypto as property, not currency, and so property tax will be applied to it.

Australia places additional emphasis on anti-terrorism measures in its financial practices, meaning that alongside crypto lending platforms following KYC (know your customer) and AML (anti-money laundering) measures, they must explicitly follow CTF (counter-terrorism financing). In many countries, counter-terrorism measures are captured within AML, but Australia separates them for clarity. Ledn is compliant with the ASIC’s guidelines, meaning you can obtain crypto-backed loans from us, with peace of mind. 

The Key Differences Between Crypto Loans and Traditional Loans

There are several key differences between regular loans and crypto loans. First, regular loans usually involve fiat money, like Australian or US dollars, not cryptocurrency.

Regular loans are typically given out by banks, which often check your credit history or do other background checks. Crypto loans are less likely to require these checks because they overcollateralize as a safety precaution.

Another difference is interest rates. You might find better rates with crypto loans because it's cheaper for lenders to provide these services. They're often secured with cryptocurrency, which cuts costs, and these savings are passed to borrowers. Additionally, the crypto lending market is highly competitive and operates with fewer costs. Unlike traditional banks, many crypto platforms do not have physical locations, lots of employees, or the banking regulations, allowing them to offer more attractive rates.

What are The Best Crypto Lending Platforms in Australia?

Let's take a look at some of the best crypto loans for Australian residents, and provide a brief overview of them.

Ledn

Ledn is a leading choice for crypto loans, offering competitive lending and saving rates without hidden fees.

Other crypto lending companies can be unclear about their operations and some have declared bankruptcy with little prior warning. Ledn has an unblemished record of never pausing client withdrawals, and offers Proof of Reserves information for peace of mind. It prioritises asset security with world-class protocols, AES-256 encryption, 2FA activation, and storage through qualified custodians, like BitGo. Ledn is committed to clear and open communication, ensuring clients are always well-informed about their financial dealings. They can check how assets are being used through monthly Open Book Reports.

Ledn's Standard loans have a current annual percentage rate (APR) of 12.4% and a loan-to-value ratio of 50%.

They also offers custodied loans, where collateral is not used to subsidise rates. This means, for a higher interest rate, clients can be assured their collateral is safely stored and not being lent out. It is ideal for those who prefer this extra security.

Ledn’s custody loans come with the same easy-to-use interface and application process as their standard counterparts – there’s no need for a complex process to manage your loan collateral. These custodied loans are not subject to the credit risks that come with rehypothecation activities related to standard loans.

Ledn also offers their exclusive B2x loans, a service that combines a Bitcoin-backed loan with the purchase of an equivalent amount of BTC. Once the loan is repaid, borrowers receive both their original collateral and the additional Bitcoin. This positions B2x loans not just as a lending service, but also as a tool to increase your assets, perfect for those looking to expand their Bitcoin holdings.

Aave

Aave is one of the leading DeFi crypto loan platforms on the market. This service hold a prestigious spot as one of the catalysts of the decentralized loan world. For ETH, it offers a variable borrow APR of 2.47%, although the number is known to fluctuate significantly over time. Its maximum loan-to-value is 93.00%. Aave supports a range of collateral options, although they’re exclusively found within the Ethereum ecosystem, meaning that Bitcoin is not included. The best you can get from Aave is wrapped BTC, which is a mere representation of Bitcoin’s value, transposed onto the Ethereum network. Aave functions via liquidity pools, where lenders lock their assets away via smart contracts, making them accessible to borrowers. 

Salt Lending

Salt offers crypto-backed loans for Bitcoin, Ethereum, USDC, and USDT. For Australia, they only offer business loans, although in other regions personal loans are also supported. Their APR ranges between 8.95-14.45%, with an LTV of up to 50%.

YouHodler

YouHodler is a cryptocurrency platform offering various blockchain-focused services, including loans. They accept a wide range of cryptocurrencies as collateral, from popular ones like Bitcoin to many lesser-known altcoins. They offer different loan-to-value ratios, including options at 97%, 90%, 70%, and 50%. 

Vield

Vield is a centralised crypto lending platform service that provides Bitcoin and Ethereum-backed loans in Australia. Their minimum loans are valued at $2000 USD, with a 13% APR, and a loan-to-value ratio of 50%. They also offer non-custodial crypto debit cards.

The Risks of Crypto Loans

Like all lending options, crypto loans come with some inherent risks. However, it's generally less financially dangerous than direct trading. Let's focus on two key aspects to be mindful of.

Firstly, understand the implications of defaulting and repayment. If you use crypto as collateral and its value drops, you might need to add more crypto to keep the loan secure. Also, if you default on your loan, your collateral could be sold off. Different lenders have their own rules around this, and it's crucial to know these before you take out a loan.

Secondly, there's the risk of the lending provider failing or shutting down, especially if they're a decentralised protocol. This isn't uncommon - several well-known crypto lending services have gone bankrupt or insolvent in recent years, with BlockFi and Celsius Network being two notable examples.

To minimise this risk, choose a lender with a strong reputation for transparency and good risk management. For instance, Ledn's custodied loans are protected from the credit risks in their standard loan offerings. Often, the lenders that fail are those with poor risk management, leading to financial issues they then try to hide from their customers.

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

Alternatives to Crypto Loans

If you need to access funds but don't want to take out a crypto loan, there are alternatives:

Traditional Loans

For those who prefer dealing with standard currency, traditional loans can be a more suitable option. They are particularly useful if your money is in fiat form, like Australian dollars.

Staking

If you own certain cryptocurrencies, such as Ethereum or USDC, staking can be a profitable choice. By staking your crypto, you can earn interest, serving as a form of passive income. Typically, this involves locking away your crypto for a set period. Once this period ends, you regain access along with the earned interest.

Staking is a good alternative if you have a substantial amount of cryptocurrency from a proof-of-stake blockchain, and do not need immediate access to your funds, as significant returns might take some time to accumulate. 

Qualifying for a Crypto Loan in Australia

These are the three elements you should consider so you can take out a crypto loan in Australia.

Credit Checks

Crypto lending platforms in Australia vary in their approach to credit checks. Some might skip traditional credit checks, focusing instead on your digital assets used for collateral, while others may incorporate credit assessments for risk evaluation, particularly for larger loans.

Digital Assets

Different platforms accept different digital assets as collateral. The most common are major cryptocurrencies like Bitcoin and Ethereum. The required collateral amount varies, often depending on the market volatility and value of the digital asset.

Financial Standing and Repayments

Your financial standing may still matter. Some platforms might choose to review your income, debts, and financial history. Repayment terms, including interest rates and schedules, differ across platforms. Sometimes, offering higher collateral can lead to more favourable loan terms, especially if your financial standing is not strong. That being said, it’s quite rare to find such rigorous checks in crypto, overcollateralization means these precautions are not always needed.

How to take out a Crypto Loan in Australia

Taking out a crypto loan in Australia is straightforward. Here's a brief overview of how to go about it:

1. Choose a Crypto Lending Platform

First, select a crypto lending service, such as Ledn for BTC or ETH-backed loans.

2. Create an Account

You'll need to sign up and create an account with the chosen lending platform. This often involves providing some personal details and going through a quick verification process.

3. Deposit Collateral

Crypto loans typically require you to deposit cryptocurrency as collateral. The type and amount of crypto needed will depend on the platform's requirements and the size of the loan you're seeking.

4. Understand Terms and Conditions

Carefully review the loan terms, including interest rates, repayment schedule, and conditions under which your collateral might be at risk.

5. Apply for the Loan

Once you've deposited your collateral and agreed to the terms, you can apply for the loan. Approval processes and times can vary between platforms.

6. Receive Funds

If approved, the loan amount will be disbursed to you, usually in the form of cryptocurrency or stablecoins, which you can then convert to Australian dollars if needed.

Who Should (and Shouldn’t) Use Crypto Loans in Australia?

Whether a crypto loan is right for you depends on various factors.

Reasons a Crypto Loan Might Be Right:

• Good for long-term holders: long-term holders can use their crypto to quickly access crypto without having to sell their assets and lose their position.
• Quick Access to Funds: Crypto loans can provide fast access to capital, often with a simpler approval process compared to traditional loans.
• No Credit Checks: Many crypto loans don't require credit checks, making them accessible even if you have a low credit score.
• Maintaining Crypto Investments: If you believe your crypto assets will appreciate in value, a crypto loan allows you to access funds without selling your investments.
• Potential Tax Benefits: Borrowing against crypto might have tax advantages compared to selling your crypto assets.

Reasons a Crypto Loan Might Not Be Right:

• Short-term trading complications: if you’re a minute-trader, crypto loans might slow down your process, and prevent you from quickly selling assets.
• Market Volatility: The value of your crypto collateral can fluctuate, potentially requiring you to add more collateral or facing liquidation.
• Complexity: Managing a crypto loan can be complex, especially for those not familiar with the cryptocurrency market.
• Regulatory Uncertainty: The crypto market can be affected by regulatory changes, which might impact your loan terms.

Why Use Ledn For Your Crypto Loan in Australia?

With many options available, each offering unique deals, interest rates, and loan terms, it's important to find a lender that aligns with your business needs. Here's why Ledn stands out as a top choice for crypto loans in Australia.

Competitive Lending Rates

Ledn offers competitive lending rates with no hidden fees, making it an attractive option for borrowers looking for transparent and cost-effective solutions.

Strong Operational Integrity

Unlike some platforms that have faced operational issues or even bankruptcy, Ledn has a track record of reliability, having never paused client withdrawals.

Proof of Reserves and Asset Security

With an emphasis on asset security, Ledn implements world-class protocols including AES-256 encryption and two-factor authentication (2FA). Moreover, they use qualified custodians like BitGo for asset storage, ensuring the safety of your collateral.

Transparent and Open Communication

Ledn is committed to keeping its clients well-informed. Monthly Open Book Reports let you see how their assets are being used.

Flexible Loan Products

Ledn offers various loan products, including standard crypto loans with a 12.9% APR and a 50% loan-to-value ratio, as well as custodied loans. These custodied loans provide an added layer of security, assuring clients that their collateral is safely stored and not being lent out.

B2X Loans

Unique to Ledn, B2X loans combine a Bitcoin-backed loan with the purchase of an equivalent amount of BTC, offering both a lending solution and a tool to increase your position.

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FAQ

Are crypto loans taxable in Australia?

Crypto loans are taxable for Australian citizens. If you use a centralized lending platform, then transferring ownership of your crypto collateral could trigger a capital gains tax event. This can also occur if you’re using a DeFi service and you choose to wrap or unwrap your crypto, as this process may involve ownership changing.

What is the difference between CeFi and DeFi crypto loans? 

A centralized finance (CeFi) loan is where you work with a company that has an organizational and non-distributed structure. It means your collateral options will involve a custodian, or a guardian who holds onto your assets for the duration of the loan. 

A decentralized finance (DeFi) loan, on the other hand, is where you use a blockchain-based protocol to secure your loan. This means your money does not change hands, but rather is locked away using cryptographic and smart-contract methods. 

Why do only centralized services offer Bitcoin loans?

Bitcoin’s blockchain is architecturally different from most other assets on the market. Due to its age and legacy, its blockchain was not created to be interoperable (meaning it cannot connect to other chains and networks). As a result, it does not typically function within a decentralized setting, as it lacks native smart contract functionality that DeFi protocols rely on for automatic activities. Therefore, if you want a Bitcoin-backed loan, you need to work with companies like Ledn, who have human intermediaries to issue and store funds.

Ready to get started with a crypto loan?

Crypto loans offer quick approvals, no credit checks, competitive interest rates, global access, privacy, and asset retention – making them an efficient solution for immediate funding without selling your Bitcoin or Ethereum. Before applying, assess your financial situation and understand the loan terms, including the Annual Percentage Rate (APR), loan duration, collateral requirements, and fees.

Interested?

Learn more about Ledn loans

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

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