Sirwin
Sirwin

Need A Loan? Features Of Cryptocurrency Loans

By Antareum | Antareum | 18 Jun 2020


The cryptocurrency market opens up a lot of opportunities for investors. Loans in Bitcoins for many seem absurd, since the companies that issue them do not provide any government guarantees. In addition, the asset's exchange rate can sink or rise at any time, so you will have to pay much more in dollars.

Despite a large number of pitfalls, the Bitcoin lending service is gaining popularity around the world. In this article, we will understand the subtleties of cryptocurrency loans and highlight the best projects related to the option.

 

How Bitcoin lending works

Financial companies have started actively introducing a ban on the use of credit cards for the purchase of digital assets since 2018. The first decision was made by Bank of America and JPMorgan Chase, then Toronto-Dominion Bank and many others joined them. Customers received information about the ban in advance, but even this did not save the financial giants from criticism. During the period of refusal of banks from such operations, the cryptocurrency market was in a difficult situation, as the phase of its devaluation began after reaching highs at the end of 2017.

Now the industry looks more stable, and the volatility of most assets shows minimal values. Against the background of this trend, lending in Bitcoin and other cryptocurrencies began to gain popularity. There are several reasons why this type of loan has become more relevant:

  • Minimum interest rate.

  • A large number of traders who are comfortable receiving funds directly in cryptocurrency, and do not spend time on converting Fiat.

  • Simplicity of requirements for borrowers. Many users who were rejected by banks were able to get loans in cryptocurrency.

There is another similar type of lending, but in this case the client receives a loan in Fiat, and the collateral for it is cryptocurrency. This is very convenient during periods of draw-down in the value of assets, since the user can not only - not lose money on commissions, but also get a benefit.

 

Where to get a loan in Bitcoin

Lending in digital assets is more accessible for residents of the United States and Europe. You also need to remember that the client provides the resource with personal data, just as when signing a contract with a Bank, which is why you should approach the choice of a lender responsibly. There are even special portals that collect a rating of the best services for cryptocurrency loans.

 

Projects that issue loans in cryptocurrency

In the cryptocurrency lending industry, there is also a peculiar credit history of its own, in which the rating of a particular customer is spelled out. Some scammers manage to raise indicators on small loans, then get funds and simply disappear. As a rule, they are immediately entered into the database, but the proceedings usually lead to nothing. The only incident with court hearings that resulted in the victory of a credit institution occurred in the United States. Then the borrower, who received a loan of 10 thousand dollars in Bitcoins, not only returned them forcibly, but also paid a fine in the prescribed amount.

 

Before you start working with a cryptocurrency lending service, you need to make sure that it is reliable.

 

 

Bitbond

This platform was initially focused exclusively on the German market, but later entered the international arena. It operates on the principle of P2P lending. The service was launched in 2013, and now its users are approximately 1.2 million customers. Only in 2016, the company managed to obtain a license from the financial regulator of Germany. Experienced users note that the credit service has a user-friendly interface and does not require you to provide unnecessary information. The application review process takes only a few hours. After that, you can get the cryptocurrency to your wallet or transfer it directly to an exchange for Fiat withdrawal.

 

BTCPOP

The platform also uses a P2P lending system. On it, investors themselves can issue loans to legal entities and individuals. The portal differs from its analogues in having its own "rules of the game", which require full verification of the user. The platform also offers several tools for searching for investors at once. In fact, the owners of the cryptocurrency simply transfer it to work, which allows assets not to stagnate, but to multiply even during periods of devaluation or a strong correction.

The service is characterized by a very professional administration and support service that answers questions around the clock. For withdrawing funds from the platform, there are several options, including direct transfers to wallets or Bank cards, but in a Fiat equivalent at the current exchange rate.

 

What you need to get a loan in Bitcoins

To get a loan in Bitcoins, it is enough to go through a number of procedures that are also present in the process of issuing a loan by an ordinary Bank. In fact, the Person2Person technology is not a loan, since the funds come directly from the investor. The service itself does not have its own capital, but acts as an intermediary.

Accordingly, to get a loan in Bitcoins, you do not need to meet high requirements. Because of this, such financial services are used by customers who were refused by regular banks. Services for cryptocurrency lending most often operate according to the following scheme:

  1. Verification. The client must complete a full registration and fill in their profile by uploading their photo, links to all social networks, passport data, document screenings, Bank statements, and much more. Only after checking the information, the service can issue a loan. Some even require you to provide a snapshot of the Bank card that funds will be transferred to when choosing a service for working with Fiat.

  2. Agreement on the terms of the loan. After registration, the client signs a contract that specifies the terms of refund, terms of payment, withdrawal fees, rates, and much more.

  3. Risk allocation. To reduce risks, services often use a collective lending scheme. This means that the loan is issued by several investors at once. This approach makes it possible to significantly reduce risks for borrowers.

 

Will banks and MFOs issue loans in Bitcoin in the future

Prospects for the development of crypto-currency lending still look vague due to a number of factors. First of all, the sphere is significantly hindered by the lack of legislative norms that could give companies and their clients guarantees that in the event of bankruptcy of the service, investors will not remain without investments. It is possible that the situation will change in the future, but for now, cryptocurrency lending remains the "underground" system in the financial industry.

 

How do you rate this article?

1



Antareum
Antareum

Keep up to date with the latest and important investing, finance and cryptocurrency articles.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.