Crypto Lending Calculator
Free Crypto Lending Calculator. Calculate projected lending returns using APY, compounding model, term length, and platform performance fees.
Rates, lock periods, and real payout schedules vary by protocol and platform. Use conservative assumptions for planning.
How to use Crypto Lending Calculator
The Crypto Lending Calculator computes interest earned or owed for cryptocurrency lending and borrowing positions on DeFi protocols or CeFi platforms. Enter your principal, APY rate, duration, and compounding frequency to project final balance and total interest — comparing lending versus borrowing economics in one view.
Use it to evaluate whether depositing crypto on Aave, Compound, or Morpho at a given supply APY generates meaningful returns compared to simply holding. For borrowers, it shows the total interest obligation over the loan term and the effective annualized cost of the loan. Compare multiple platforms side-by-side to optimize your lending or borrowing allocation.
Input guide and assumptions
Principal is your deposit amount (for lenders) or loan amount (for borrowers) in USD or crypto value. APY is the supply APY for deposits or borrow APY for loans — these fluctuate based on utilization rates and are available on the protocol's dashboard. Duration can be set in days, weeks, months, or years.
For variable-rate protocols, the calculator uses the current APY as a constant approximation — actual earnings may vary as rates change. Compound interest mode reinvests accrued interest back into the principal each period. For borrowers, the health factor threshold field lets you see the collateral requirements and liquidation risk alongside the interest cost.
How to interpret results correctly
The crypto lending calculator outputs two perspectives: borrower cost (interest paid on the borrowed amount) and lender yield (interest earned on deposited collateral). For borrowers, the key metric is the effective annual borrowing rate — compare this to the expected return from what you are funding with the borrowed capital. If you borrow at 8% APR to earn 15% yield elsewhere, the arbitrage spread is positive. If the funded position yields less than the borrow rate, the position loses money on carry.
The health factor is the most critical lending metric: it represents how close your position is to liquidation. Health factor = (collateral value × liquidation threshold) / borrow value. A health factor of 1.0 means liquidation. Protocol-specific safe thresholds vary but staying above 1.5 provides an adequate buffer for normal volatility. The calculator shows how much collateral price decline brings you to the liquidation threshold.
Practical scenarios and planning workflow
Collateral loan-to-value planning: before depositing collateral and borrowing, use this calculator to find the safe borrowing amount. Enter your collateral value, the protocol's liquidation threshold for your collateral asset, and your desired health factor (minimum 1.5). The calculator returns the maximum safe borrow amount that keeps you above your target health factor.
Interest arbitrage calculation: deposit a stablecoin as collateral, borrow another stablecoin, and redeploy the borrowed funds in a higher-yield protocol. Enter the borrow APR and the destination yield APY into this calculator to see if the spread is positive after accounting for the health factor buffer required.
Risk and execution checklist
- Before taking a crypto-backed loan: 1) Verify the collateral asset's liquidation threshold on the specific protocol (ETH may have 80% LTV on Aave, but only 70% for smaller tokens). 2) Calculate your health factor at current prices and at 30% lower collateral price. 3) Set up price alerts to notify you when health factor drops below 1.5.
- After borrowing: never let health factor drop below 1.2 without actively managing the position. At 1.2, a 5–10% collateral price drop triggers liquidation, and liquidation penalties are typically 5–15% of the collateral — a significant additional loss.
Common mistakes to avoid
- Borrowing at maximum LTV (health factor near 1.2) and then not monitoring. Crypto collateral can drop 20–30% in a single day. At 80% LTV with ETH collateral, a 25% ETH price drop takes health factor below 1.0 and triggers liquidation even before you can react — especially during volatile overnight moves.
- Using volatile assets as collateral to borrow stablecoins and then deploying the stablecoins into yield strategies without accounting for the margin maintenance cost. If ETH drops 40% and your health factor hits liquidation, you lose the ETH collateral penalty on top of any yield losses from the deployed stablecoins.
Performance benchmarks and expectation ranges
Typical lending parameters (2026): Aave v3 ETH collateral: 80% LTV, 82.5% liquidation threshold, 5% liquidation bonus. Compound v3 USDC borrow: 4–8% APR variable. Aave USDC supply yield: 3–6% APY. The typical carry trade spread (borrow ETH-backed stablecoin, lend stablecoin) is 2–5% APY net of borrow costs, with liquidation risk as the primary risk.
Safe health factor benchmarks: 1.5 = conservative (can absorb 25% collateral decline for most LTV ratios). 2.0 = very safe (can absorb 40%+ decline). 3.0+ = over-collateralized with minimal liquidation risk but poor capital efficiency. Most experienced DeFi users target 1.5–2.0 health factor.
Frequently asked questions
What is a safe LTV ratio for crypto lending?
Most platforms recommend keeping your loan-to-value ratio below 50% to avoid liquidation. At 50% LTV, the collateral price would need to drop roughly 33% before liquidation triggers. Conservative borrowers target 25-35% LTV, giving a larger buffer during volatile market swings.
CeFi vs DeFi lending — which is safer?
DeFi lending (Aave, Compound) is transparent and non-custodial — you keep your keys and can audit the smart contracts. CeFi platforms (Nexo, BlockFi) offer simpler UX but introduce counterparty risk, as seen in the 2022 collapses of Celsius and Voyager. Most risk-conscious users now prefer DeFi with audited protocols.
What happens if my collateral drops below the liquidation threshold?
The protocol or platform automatically sells part (or all) of your collateral to repay the loan. On Aave, a liquidation penalty of 5-10% is applied on top. You lose the liquidated collateral permanently. To prevent this, monitor your health factor and add collateral or repay part of the loan when LTV rises above 60%.
Can I earn interest by lending stablecoins?
Yes. Stablecoin lending typically yields 3-8% APY on DeFi platforms like Aave and Compound, depending on market demand. USDC and USDT are the most liquid. Rates fluctuate based on borrowing demand — during bull markets, rates often spike above 10% as traders borrow to leverage.
How are crypto lending rates determined?
DeFi rates are set algorithmically based on utilization — the ratio of borrowed to deposited funds. When utilization exceeds ~80%, rates increase sharply to incentivize repayment and new deposits. CeFi platforms set rates manually based on their treasury needs and competitive positioning.
Do I pay taxes on crypto lending income?
In the US, interest earned from crypto lending is taxed as ordinary income at your marginal rate (10-37%). The taxable event occurs when you receive the interest, not when you withdraw. Keep records of every interest payment with its USD value at the time of receipt for tax reporting.