How to Get a Loan to Buy Bitcoin (and other Cryptocurrencies)

By Crypto101 | Finances

Jan 09

Many people are trying to find any means of accruing funds to invest in cryptocurrencies due to its explosive growth. Taking out a loan to buy bitcoin (or other cryptocurrencies) is one of the ways do so.

A recent study found that over 20% of people buy cryptocurrency with borrowed money. Whether this is a good idea or bad depends on personal circumstances. This 20% only includes credit cards; so if you include personal loans into the statistic, it would likely be higher than 20%.

While using your credit card to invest in crypto may be an option, it is not the best option as the limits are lower and the interest rates are higher. In fact, most credit cards will now charge your bitcoin purchase as a cash advance, resulting in much higher fees and interest. In addition, Coinbase charges enormous fees to buy with a credit card. 

To buy $4,000 worth of cryptocurrency, Coinbase charges $159.60 if you use a credit card. However, they will only charge $59.60. if you use a loan to fund your checking account. That is a $100 difference in fees. 

This article will not advise you on whether you should take a loan to buy bitcoin or not; that's a personal decision left up to youInstead, this article will show you how to get an unsecured personal loan at a low interest rate to buy bitcoin (and other cryptocurrencies). If you want to find out how, read on.

What Exactly Is Leverage?

According to Investopedia: Leverage is the investment strategy of using borrowed money: specifically, the use of various financial instruments or borrowed capital to increase the potential return of an investment. In laymen's turn, it is using other people's money to increase your return.

As an example, if you put $1000 of your money into Ethereum at the end of 2017, you would have experienced a 48% return on your investment at the time of this writing. Your profit would be $480 ($1000 * 48%). If instead, you borrowed $1000 and put $1000 of your own money into Ethereum, your total profit would now be $960 ($2000 * 48%) -- which is double! At this point, you can sell $1000 worth of Ethereum and pay back the principal you owe on the loan.

The point of leveraging is to magnify your gains. 

Where To Get A Loan to Buy Bitcoin (Or Other Cryptocurrencies)

There are many places you can go to find loans, but the easiest and most streamlined platform out there is SoFi. This is a very popular peer-to-peer lending platform that people use for unsecured personal loans. And unlike other peer-to-peer lending platforms, SoFi does not charge an origination fee. Origination fees can cost thousands of dollars in fees to your loan. In addition, SoFi also has the lowest interest rates out of all the peer-to-peer lenders. 

Of course in return for these benefits, SoFi does require a higher credit score to qualify. Although there is no minimum requirement, you will probably need a credit score of 620 or above in order to receive a loan from them..

To summarize the difference between SoFi and other peer-to-peer lenders, we have made this (hopefully) useful comparison table. Have a gander. If you are on your phone, you can scroll left and right to see the table.



Lending Club


Maximum Loan Amount




Time to Pay.

Up to 7 years

Up to 5 years

Up to 5 years.

Interest rate.

5 to 15%

5.99 to 35.89%

5.99 to 35.99%

Origination Fee


1 to 6% of loan

1 to 5% of loan

Min credit score req.




In addition, here is a comparison table for taking out a loan to buy cryptocurrency instead of buying with a credit card



Credit Cards**

Maximum Loan Amount



Fee on buying $4,000 of Bitcoin from Coinbase



Coinbase weekly limit



Interest rate

5 to 15%

12.95 to 23% (average low to high range)

**Note: Coinbase no longer accepts payment via new credit cards. Old credit cards that have already been added to Coinbase's system may still work.

As you can see, SoFi beats out their competitors in just about every facet of personal loan lending and is the better option over credit cards. In fact, we used SoFi as our loan processor. So we highly recommend them.

SoFi Loan Application Process

The application process is smooth, streamlined, and takes only a couple minutes to get started. It is all online so you can do it in the comfort of your own home -- no need to go to a bank! Once you are approved and both parties agree on the terms of the contract, the funds will be deposited directly to your bank account. The best thing about SoFi is that there is no penalty for paying back the loan early! So if you hit your investment plan quickly you will only pay a very small amount of interest. 

The whole loan process from beginning to when you receive your money should only take 1-2 weeks. It will go straight into your checking account and you are then ready to link it to your Coinbase account to buy. For a tutorial on how to buy bitcoin with Coinbase, go here. It offers a step-by-step guide for buying your first Bitcoin (or Litecoin/Ethereum).

Final Word on Responsible Investing

The point of leveraging is to magnify your gains. However, it can go the other way and your losses can also be magnified.

We cannot stress this enough---cryptocurrency investing is extremely volatile. In any other environment or asset class, we would not have even thought of leveraging to invest. However, we made a personal decision to leverage because, to us, the rewards greatly outweighed the risks in our circumstance. But every circumstance is different.

Please be responsible in investing. Do not lose more money than you can afford. And if you are to get a loan to invest in cryptocurrency, please ensure that you are able to pay it back.

Anything in this article should not be construed as financial advice. We are just presenting an avenue to get a loan to buy cryptocurrency if you decide to. 

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