There is a new trend seen in loan lending. With the popularity of cryptocurrency and blockchain technology, many lending firms are considering it as collateral when lending loans to people. Read this article to know more about this new service that various crypto-collateral companies have implemented to date.
Why cryptocurrency is used as collateral by loan lending companies?
Ethereum, Litecoin, and Bitcoin serve as collateral for sanctioning a loan. They have become an increasing practice amongst different members of a crypto community. This is attributed to the increase in price experienced by bitcoin that made it highly sought-after cryptocurrencies.
Bitcoin dealers are a leading firm that helps you take loans using Bitcoins, and key other cryptos. With this safe platform, you can get funds in less than five minutes. Crypto loans get sanctioned without any credit checks, collateral, and no appointments. The company has established offices in Melbourne, Sydney, and Adelaide.
What makes crypto-assets a great collateral option for loans?
Taking a loan from a bank requires endless formalities, a condition of good credit score, and a truckload of documentation to be performed. It is not a convenient process. Also, a majority of banks require collateral to issue the requested loan to the loan seeker.
To apply and get loon approval takes time. It could ultimately defeat the objective to lend the funds. Also, there is a possibility that your collateral can get rejected by the bank and other financial institutions. This can make the process to get collateral quite difficult.
Crypto assets are designed to be seamless. They are liquid as well as universally accepted mode of trading transactions. They are easy to buy and sell by anyone worldwide. Accepting cryptocurrency as collateral reduces the loan processing time, as well as frees the lender of problems regarding monetization of the collateral in case of loan default.
What are the top Lending firms that use Cryptocurrency as Collateral?
Below are some of the popular and trusted firms that grant loans to loan applications against their cryptocurrency. The most attractive benefit of these platforms is their credibility, transparency, and security that it provides by its FCA approved network and is backed by a strong team of experienced professionals.
This is a lending startup firm that offers fiat currency loans via the P2P model for all bitcoin asset holders. You need to pay certain charges to obtain their lending services on this unique digital loan lending platform.
This is another lending startup based in London. The company offer loans based on cryptocurrency collateral to people with Ether, and Bitcoin holdings. It uses its peer-to-peer lending model to execute this procedure.
From stocks to fixed deposits, and gold, there have existed various types of financial market tools that have been used as collateral to obtain credit facilities. Now with the introduction of cryptocurrency, they have also been used as a collateral option. When getting a loan in this way, you should definitely check the reliability, and reputation of the loan lender.