(2022 Guide) Bitcoloan Scam – Learn More

Updated on February 21, 2024 by Elliot Berard

BitcoLoan Scam: Overview

BitcoLoan was founded in 2016 as a business loan provider that uses blockchain technology to offer collateral-free loans. The company claims to have provided over $50 million in loans to date and has a lending limit of $100,000 per loan. While BitcoLoan does have some positive reviews online, there are also many complaints about the company, with some customers claiming they were scammed by the company.

What is a Blockchain?

Real quick, let me explain what a blockchain is since BitcoLoan uses it for their services.

A blockchain is a digital ledger of all cryptocurrency transactions. It is constantly growing as “completed” blocks are added to it with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree).

By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which would require consensus of the network majority.

A private blockchain is accessible only with permission. One cannot join it unless invited by the network administrators.

A public blockchain is often preferable for BitcoLoan services because it’s transparent. That is, anyone can view the contents of the blockchain, but users can also elect to remain anonymous. Nodes in the network aren’t controlled by a single entity, and nobody has the power to shut down the network. A public blockchain like Bitcoin or Ethereum is permissionless: anyone can join, without approval from other members of the network.

Blockchains are typically thought of as being very secure, whether you use a private or public format. Since BitcoLoan uses this secure technology, is BitcoLoan a scam? Read on to learn more about this company, what it promises, and what users are saying.

What is BitcoLoan?

BitcoLoan is a website that promises to offer business loans in return for cryptocurrency deposits. The website claims that they can provide loans of up to $500,000 with interest rates as low as 0.5%. However, there are many red flags that suggest that BitcoLoan may not be a legitimate company.

BitcoLoan has also been accused of using high-pressure sales tactics and misleading marketing materials. For example, some customers have claimed that they were promised one interest rate but then charged a higher rate. Others have claimed that they were not told about the 1% origination fee until after they had already signed up for a loan.

BitcoLoan is not a member of the Better Business Bureau and has an F rating with the organization. The company has also been the subject of numerous complaints with the Consumer Financial Protection Bureau.

BitcoLoan does have some positive reviews online, with many customers stating that they received their loan funds quickly and had a good experience with the company. However, there are also many negative reviews, with customers claiming they were scammed by BitcoLoan. Overall, it is difficult to assess the risk involved in investing with BitcoLoan due to the lack of transparency about the company’s financials and lending practices. Borrowers should be aware of the potential risks involved before investing with the company.

BitcoLoan: Business Model

BitcoLoan works by allowing users to post their loan requirements on the platform, after which lenders can bid on the loan. Once the loan is funded, BitcoLoan releases the funds to the borrower and collects a 1% origination fee. Loan repayments are made via automatic monthly payments, and borrowers can prepay their loans at any time without penalty.

BitcoLoan also offers a buyback guarantee, which allows borrowers to sell their loan for a full refund if they are unable to make their monthly payments. However, there have been complaints that the buyback guarantee is not honored by the company.

BitcoLoan is not a registered investment advisor or broker-dealer and is not subject to financial regulation. This means that there is no government oversight of the company and it is not required to disclose its financials or lending practices. This lack of transparency makes it difficult to assess the risk involved in investing with BitcoLoan.

BitcoLoan: Key Features

Key features for borrowers include:

Blockchain-based platform
Loans with long terms
No proof of identity required
Get loans fast, within 10 minutes
No approval or waiting periods
Loan amounts up to $500,000
Interest rates as low as 0.5%
1% origination fee
Automatic monthly payments
No prepayment penalty
Buyback guarantee

Key features for lenders include:

Lightning-fast profits
Become a lender with as little as a $10 investment
Protected investments because BitcoLoan freezes collateral funds in borrower accounts
Ability to partner with other lenders to invest and earn more

BitcoLoan: How it works?

Registering on BitcoLoan is totally free. You’ll need to provide you email address and/or mobile phone number, and create a password to get started.

To apply for a loan on BitcoLoan, borrowers must first create an account and provide some basic personal and financial information. The website does not perform a credit check or verify income, employment, or assets.

Once the loan application is complete, borrowers can post their loan requirements on the platform. Lenders can then bid on the loan, and the borrower can choose the lender they want to work with. Once the loan is funded, BitcoLoan releases the funds to the borrower and collects a 1% origination fee. Loan repayments are made via automatic monthly payments, and borrowers can prepay their loans at any time without penalty.

BitcoLoan: Payment Methods

BitcoLoan does not accept payments from third-party providers such as PayPal. However, the company does accept a large number of payment methods, including:

Credit cards
Debit cards
Bank transfer
Bitcoin
Bitcoin Cash
Monero
Dogecoin
Tether
Litecoin
Dash
Ethereum
Payoneer
Skrill

BitcoLoan App

The BitcoLoan app is available for both Android and iOS devices. The app allows users to apply for loans, track their loan progress, and make repayments. It also provides access to the BitcoLoan forum, where borrowers and lenders can interact.

The app has a 4-star rating on the Google Play Store and a 3-star rating on the App Store. Complaints about the app include hidden fees, difficulties in getting customer service assistance, and issues with the loan application process.

BitcoLoan: Benefits and why should you choose it?

Investors are incredibly appealing to the community for consistent earnings against their investments since the BitcoLoan platform offers a variety of incentives and innovative aspects to its users. These characteristics include:

Very quick yield:

A lender may match a borrower through the platform’s fast search using a repayment period of less than 30 days. This repayment term is usually between 30 and 90 days.

Low-risk reward:

Despite the fact that you’re a lender or a borrower on the platform, BitcoLoan takes care of it all and makes sure you get paid in a timely manner.

Agreeable terms:

You may build a passive income by investing on the site as a small lender and earning up to 1 percent each day.

Long-term investing strategy:

If you prefer to keep your bitcoin for a longer time, then BitcoLoan is the platform for you. On BitcoLoan, you can invest your bitcoins as a business loan for a 360-day term, earning 1.4% daily.

Tempting bonuses:

The BitcoLoan site offers a 10% bonus to investors who hold their funds for at least six months. All they have to do is entice their social contacts to join the platform.

Affiliate program:

You can invite your friends to use BitcoLoan, too. If they accept, you’ll make money every time they create a loan… not to mention every time they invite someone to the platform, you’ll get paid for their loans too.

How Secure is BitcoLoan?

BitcoLoan uses SSL encryption to protect borrower information and employs a team of security experts to keep the platform safe. However, because the company is not subject to financial regulation, there is no government oversight of its lending practices. This lack of transparency makes it difficult to assess the risk involved in investing with BitcoLoan.

Overall, BitcoLoan appears to be a risky investment.

How To Get A Business Loan On BitcoLoan

This seems to be the main function of BitcoLoan: lending to borrowers. Though they market themselves as being focused on connecting eager borrowers and investors, most of the company’s income appears to come from servicing and charging interest on these loans.

To get a business loan on BitcoLoan, borrowers first need to create an account and fill out a loan application. The application will ask for information about the borrower's business, including the amount of revenue the business generates and the amount of money the borrower needs to borrow.

How To Make Deposits On BitcoLoan

To make a deposit, go to the “Deposit” section of your Dashboard. You will discover a different window where you can customize your own loan conditions; the system will find a suitable borrower.

Indicate how much money you would like to invest.
Evaluate the loan terms and select your preference.
Click “Find Borrower” to start the matching service.

The system will then find a borrower that matches your parameters and have the loan active immediately. The minimal loan amount is $10, with terms lasting between 10 to 90 days. Your profit percentage is directly linked to your loan duration and account rating.

There is no upper limit to the number of loans you may take out. It will be shown in your Dashboard’s Transactions section, and it will affect your balance.

When the loan agreement expires, your entire deposit will be returned to your balance. This amount could not be withdrawn until the loan term has ended. On the other hand, you may withdraw your daily profit at any moment.

Business loans come in a variety of terms and conditions. The loan term ranges from 90 to 360 days, with a minimum investment of $100. Profit percentages can differ based on the loan’s terms. In the menu, you’ll find details about a specific Business Loan.

A group loan is a business loan, which means that it includes the whole group of lenders who contribute to the required financing amount. You may continue investing in such a loan until the entire sum has been raised.

Your business loan’s earnings are immediately added to your balance and shown in the Transfers section of your Dashboard. When the loan term has ended and the investment is accessible for withdrawal, the entire sum is returned to your account.

To invest in a business loan, first choose the loan you want and then provide the amount you are willing to spend. Then click the “Make deposit” button. Every 24 hours, your daily profits will be credited to your account.

You may have noticed that the loan conditions now include an extra profit percentage. This figure is determined by your account’s rating. Your profits rise by 0.01 percent for every 0.1 rating point increase.

How To Lend Through BitcoLoan

Lending is relatively similar for both individuals and firms; after selecting the correct entity, such as consumers on the platform, you must complete the following actions.

Log into your account and visit the deposit page.
Go to the loan to an individual portion of the deposit page, which is located on the extreme left, and choose the cryptocurrency you wish to lend as well as a time limit for return.
Click the “Find Borrower” button, and wait for the algorithm to find your match.
After performing your search, you’ll be able to see information on the borrower and your investment– like the payback date and interest rate.

Is BitcoLoan A Scam?

For one, the website does not provide any information about who owns or runs the company. This is always a bad sign, as it means that the people behind the company are trying to hide their identity. Furthermore, the website’s terms and conditions state that they can change their lending terms at any time without notice. This is another huge red flag, as it means that the company is not committed to providing transparent and fair lending terms.

Lastly, there have been numerous complaints from users who claim that they have not received their loan funds after making a deposit. This is obviously a major issue, as it means that people are losing money to this company.

All in all, it is very clear that BitcoLoan is not designed to help borrowers. Though BitcoLoan does a great job of promising a wide variety of features and benefits, many users find themselves swept away in the excitement and flat broke a few short months (or weeks) later.

BitcoLoan is what I would call a legal scam. They aren’t breaking a single law, on one hand. On the other hand, they also aren’t FDIC-insured, or backed by any major banking institutions. They have no BBB rating. They’re simply a loan shark that uses the Bitcoin blockchain to track their loans.

On paper, nothing seems particularly predatory. A few reviews have mentioned their loan rates or payment terms seemingly changing overnight, but this could easily be the result of using a mobile app to track your loans.

You can absolutely make money with BitcoLoan– and there are both borrowers and lenders who have done so. But it will never be as simple or as straightforward as the BitcoLoan marketing would have you believe. It’s a bit like gambling: you might make some money, but in the end, the house always wins.

If you are still considering using their services, I would strongly recommend against it. There are much better and more reputable companies out there that can provide business loans.

Are you looking to lend through BitcoLoan? Doing so may be slightly safer and more profitable than borrowing, but you'll still want to log-in at least once or twice a day to make sure you're away of everything you have going on.

If you’re positive you can “work the system” and have enough financial and cryptocurrency knowledge to explore BitcoLoan without going broke, you can rest assured they won’t disappear into the sunset with your money. But you may wind up responsible for costing yourself a pretty penny.

I would not recommend using BitcoLoan for any of the services they provide, overall. There are much better options available, both for borrowers and lenders.

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Elliot Berard

I buy and review courses so you don’t have to. Sometimes, I even find courses that are legitimate and worthwhile; and that’s how I accidentally came across one that led me to building a 6-figure business in a little under 5 years. Now, I still review courses because it’s my favorite hobby. 🙂 Learn more about me here.