If you’ve got some crypto you’d like to use as collateral for a loan, where do you go? The cryptocurrency market is a new frontier, with new players popping up every day. So it’s not surprising that there are multiple crypto loans platforms out there. A crypto loan is a loan that’s backed by crypto assets instead of traditional assets, like real estate, stocks, or bonds. But just because they’re backed by crypto assets doesn’t mean you have to understand cryptocurrencies to enjoy a crypto loan.
What is a crypto loan?
For the purposes of this article, a cryptocurrency loan is a loan that’s backed by crypto assets. But it’s important to note that the cryptocurrency used to back a loan does not necessarily have to be bitcoin. What is crypto? For the purpose of this article, a cryptocurrency is a digital, decentralized currency that can be created and used to exchange real world goods and services. Cryptocurrencies have no fixed value, but they do have a fixed “miner’s fee,” which keeps their price stable. The more computing power an individual or group uses to verify transactions, the more fees they’ll earn. This is a very energy-intensive process, which is one of the main reasons why the price of a cryptocurrency can be volatile.
Why choose crypto loans over traditional loans?
Because you get to lend your cryptocurrency directly to another person, without paying interest. It’s like money in the bank but without a banker taking a fee for depositing your money. You can decide the maximum dollar amount you’ll lend to a person, so you don’t get stuck with too much cash at the end of the term. You can do this directly in a single transaction, from your fiat wallet to your crypto wallet. You can expect to get your money back within a day, if not within hours. You can rest assured that the loan you get is the real thing, and not a sham. You can also expect to get the exact same amount as you borrowed — just in a different form. If a crypto borrower doesn’t pay, there’s no interest, so the loan itself isn’t risky.
How do I apply for a crypto loan?
Crypto Loan services work in similar ways, with some differences: Crypto Loan Applicants Go On-line To Apply Cryptocurrency Exchanges Investing in crypto for the first time can be a daunting prospect. Many investors may be familiar with bank transfers and other payment methods, but they may not have experience with crypto lending platforms. The cryptocurrency space is a decentralized community, and those who want to take part will need to find their way on a number of crypto exchanges to buy and sell crypto assets. Buying cryptocurrency on an exchange is a lengthy and frustrating process. And although you may think that cryptocurrency trades are transparent, they aren’t.
What are the best platforms for crypto loans?
Here are the best platforms for lending crypto in 2018: Karma Founded in 2016, Karma is a peer-to-peer crypto lending and remittance platform. Users have used their funds to lend and receive $60,000 worth of cryptocurrency. The platform is secure with automatic, multi-sig signups and a soft and hard cap, which allows them to issue higher limits. With Karma, you can receive cryptocurrency directly from the borrower with no credit checks. Their platform also lets you move money from your balance directly to your preferred cryptocurrency wallet. Zero-fee lending is another plus. You pay only 10% in fees and interest on your loans. Their terms also include a 90-day close date. LendToken LendToken is a crypto lending platform focused on LTC and BTC.
8 of the Best Platforms For Crypto Loans
The first crypto lending platform that I’m recommending is called xenoFX. This platform is popular in the crypto community because it’s easy to use and they have a solid reputation for customer support. They have no fees or interest attached to their loans and so far they have only accepted peer-to-peer lending. With peer-to-peer lending, the investor holds their loan until the borrower is able to repay the loan in full. If you want to go one step further, it’s possible to work with an LPS broker in order to make your loan bigger. A syndicated loan is one in which an investor holds multiple loans, and the loans are sold to other investors at a price, and the borrower must pay off the loan in order to recover the money loaned to them.
Did you think you were done with cryptocurrency all together? Have you been thinking of putting your crypto to work for you, and am I right?