A crypto loan allows individuals to borrow funds using cryptocurrency as collateral. Users deposit their crypto assets, such as Bitcoin or Ethereum, into a platform offering loans, which then evaluates the value of the collateral.After assessing the collateral, the platform provides a loan, usually denominated in stablecoins or fiat currency. Borrowers must repay the loan within a specified period, along with interest, to reclaim their collateral. If they fail to repay, the lender can liquidate the collateral to recover their funds.These loans offer a way for crypto holders to access liquidity without selling their assets. This can be beneficial for those wanting to take advantage of investment opportunities or cover expenses while retaining ownership of their digital assets.Crypto loans have gained popularity due to the rise of decentralized finance (DeFi) platforms, which facilitate these transactions without traditional financial intermediaries. However, borrowers should be aware of risks, including price volatility and the potential for liquidation if the value of the collateral drops significantly.