Under-collateralized loans in decentralised finance is a relatively new phenomenon. First off, collateralized loans are those where the borrower has to avail collateral that is two to three times bigger than the loan/credit they are trying to secure.
Put it simply current collateralized loans are OVER COLLATERALIZED . So under-collateralized loans in defi are simply the opposite of over-collateralized loans. For these loans the borrower simply puts up little to no collateral for the loan they intend to secure.
There are a number of DEFI platforms that are set to revolutionize defi lending, some are still in the testing phase but once fully rolled out will be a big game changer in the world of finance. One of these is Hashstack finance. Hashstack promises to provide borrowers up to 300% of there collateral, that's 3 times the collateral you provide, sounds too good to be true but it's already here.
Teller finance is another platform that promises to offer under collateralized loans-that is borrowing with little to no collateral. It does this by connecting to your bank account, fortune teller nfts and defi wallet like metamask . Teller is available on the etherium mainet.