Crypto Lending Rates: What Sets APR and What Borrowers Actually Pay Interest On

Two borrowers can pledge the same amount of Bitcoin and end up paying very different interest rates. The gap usually comes down to a few mechanics: how the rate is set, how much of the collateral’s value is borrowed, and how the platform charges interest. Loans and credit lines let holders get cash without selling, and many centralized exchanges and decentralized platforms offer them. So how does crypto lending work, and what does it cost? That varies by lender and product, and the answer starts with how crypto lending rates are set. Pros and Cons of Fixed Rates A fixed rate stays the same for the life of the loan. It is most common in centralized finance (CeFi), and it makes every payment easy to calculate in advance.

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