It’s common to see a crypto loan service platform accept only Bitcoin as collateral while overlooking altcoin options entirely. Yes, BTC is the original cryptocurrency and the most widely recognized asset in the digital economy. Its reputation as “digital gold” makes it a natural choice for lenders. However, with hundreds of millions of users in the crypto industry today, the landscape has shifted. Diversifying away from the blue-chip coin has become the norm. In fact, more investors now hold altcoins such as LTC, BCH, DOGE, and XMR alongside BTC. 

In this article, we’ll explore how an altcoin can be used as collateral-pledged loans, which types are best suited for borrowing, and the advantages of choosing a platform that supports not only Bitcoin but a broader range of altcoins for its crypto loan service.  

Crypto Loan in 20 Seconds: What Is It? 

A crypto loan is essentially a way to unlock the value of your assets without selling them. Instead of liquidating long-term crypto holdings and losing them forever, miners can pledge them as collateral and receive a loan in fiat or stablecoins like USDT, USDC, etc. 

A crypto loan service allows users to maintain exposure to potential price appreciation in their assets while gaining the liquidity needed to fund other investments or cover emergencies. These types of loans are very popular among miners, traders, and investors who do not want to disrupt their long-term strategies or risk losing future profits. 

How to Use Altcoins as Collateral-Pledged Loans

While the concept of crypto loans is simple, the variety of digital assets accepted as collateral by reputable lending platforms is somewhat more complex. With Bitcoin dominating the space and increasingly recognized by traditional financial markets as a legitimate store of value, virtually all crypto loan service platforms accept BTC as collateral. However, as altcoins gain prominence, these platforms now support multiple cryptocurrencies, making borrowing more accessible and flexible for users. 

Here’s how to leverage altcoins for crypto loans:

1.Buy the Altcoin

The first step toward obtaining an altcoin loan is to acquire these alternative cryptocurrencies as collateral. Popular altcoins like LTC, DOGE, and others can be bought with fiat currencies on crypto exchanges and stored securely in crypto wallets. These can be pledged as collateral on a lending platform, allowing users to borrow funds. 

2.Choose a Reputable Crypto Loan Service Provider

Selecting a reliable, reputable lending platform is just as important as choosing the right altcoin as collateral. Many providers offer crypto loan services that support a wide range of altcoins, ensuring both security and flexibility for borrowers.

3.Select the Altcoin to Use as Collateral

On the crypto loan platform, choose the altcoin to use as collateral for a loan. It’s important to consider the market volatility of the selected altcoin, as unexpected price swings can trigger automatic liquidations. 

4.Deposit your Altcoins to Collect a Loan

After selecting an altcoin, deposit the coins into the lending platform to securely lock them as collateral. Once the assets are deposited, the company verifies them and makes the corresponding crypto loan available.  

5.Choose Loan Terms

Set and review key loan terms before confirming any agreement. This includes negotiating the Loan-to-Value (LTV) ratio, interest rates, repayment schedule, loan duration, and default penalties, among other terms. Careful evaluation of these factors helps manage risk and avoid unexpected loan liquidations.

6.Monitor Collateral

Once the loan is received in fiat or stablecoins, it is essential to continuously monitor the pledged collateral to ensure its value does not fall below the required threshold. Most crypto loan service platforms, like ViaBTC, provide alerts and notifications when the collateral’s price approaches a critical level that could trigger liquidation. 

7.Repay Altcoin Loan

Before the due date, repay the borrowed amount along with any accrued interest through the lending platform. Once this is complete, investors can withdraw their pledged altcoin collateral back to their wallets. 

Advantages of Securing Collateralized Loans with ViaBTC 

ViaBTC is a next-generation crypto mining pool supporting BTC and over 20 other PoW altcoins. The platform offers collateralized crypto loans, automatic coin features, and fast payouts for miners, making it an all-in-one solution for both mining and crypto financing. 

Its lending services accept a variety of altcoins as collateral, providing several key advantages to users:

• Flexible and secure collateral options
• Fast access to loan funds 
• Lower risk exposure through widely traded and highly liquid assets.
• Borrowing without selling assets to maintain potential for future appreciation.
• Clear and transparent loan terms and interest rates.
• Timely updates about loan status, market changes, and repayments. 

Final Thoughts

The integration of altcoins as collateral for crypto loan services reflects the evolving needs of miners and investors seeking liquidity without selling their diverse assets. Altcoins are generally more volatile than Bitcoin but offer more avenues for wealth creation for holders. 

At ViaBTC, miners can borrow funds using an altcoin as collateral and repay at any time. Borrowers can pledge multiple altcoins simultaneously, with no limit on the total collateral amount. This approach allows users to unlock liquidity instantly, manage risks across different assets, and protect potential market gains.  

Disclaimer 

The article is for informational purposes only and does not constitute financial advice. Readers are recommended to conduct independent research or consult professional advisors before making any financial decisions. Mention of any products or services is not an endorsement.