3 Rules of Crypto backed Loans Every Investor Should Know

Investment of any sort is risky and is mostly played by rules by all genres. Even a child when he sets up a trade of toys exchange quickly analyze benefits he could reap and risks he could face, then how could the world of crypto backed loans be spared? Today’s post is all about the rules, precautions to be taken while signing up for crypto backed loan.

Three Rules of Crypto backed loans

 

Rule #1 – Diversify your Portfolio

Distributing your investment to multiple borrowers based on loan amount, geography or duration is the first rule to be followed. So, for example, if you have planned to invest 10 BTC amount, then break it into chunks, i.e., funding 2BTC for five borrowers that is a mixed bag of long term or short term and belongs to developing and developed nation.

By choosing among the developed/developing nation, you are reducing your risk of default, and while long-term loans help in reducing the workload of follow-ups, short-term offer the benefit of reinvesting and improving liquidity. So choose accordingly.

Rule #2 – Know the Risks

While lending offers benefits of high returns, it is still in a nascent phase with very less awareness. So if the borrower fails to repay the amount, would it lead you to bankruptcy? Or analyze the amount of how much you could lose say the borrower is new and does not have much knowledge on the latest technology, so make sure all of your eggs are not in the same basket. Crypto backed loans are high on returns but also come with high risk.

Rule #3 – Analyse, Learn and Realign your investing techniques

Well, there is no rulebook of crypto backed loans technique that one could follow and eliminate risk, but make sure once every fortnight or even monthly analyze your crypto portfolio in terms of returns and realign or redistribute to make it profitable.

All it takes is time and perseverance to get good returns on crypto backed loans; it’s like sowing the seeds and watering it daily until you see the flowers and finally fruits. However, beware of harsh sunlight, thunderstorm, weeds, and pests that could harm your investment.

Happy investing!

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Could Crypto Loans reduce credit risk and margin call risks?

Crypto Loans or Blockchain-backed loans is the trending concept these days that assist crypto enthusiast in earning profits. While lenders enjoy the benefit of earning interest on their digital currency, borrowers use the funds to short sell or shorting. The interest rate earned by lenders vary from 5 – 50% each year.

As per a study by the Unchained Capital, the potential lending market for crypto assets is estimated at around $20-30 billion. Even though cryptocurrencies are highly volatile, they also offer high liquidity. Bearing in mind the possible risks of volatility, liquidity similar to fiat money makes cryptocurrency an ideal asset for loans in fiat.

But how could they be used to reduce credit risk? Let’s explore –

Crypto loans reducing Credit Risks?

Crypto-backed loans offer a unique opportunity to the borrowers to receive funds for any investment they want. Unlike traditional banking where interest rate varies with home loans, car loan or personal loan, crypto loans work with a simple equation of obtaining a loan in fiat of up to 50% of the market value of its crypto asset. Since the deposit is always more prominent than the loan amount, the creditor never can face the defaulter’s risk.

However, in cases when volatility has exceeded the threshold, the lender has the right to make a margin call, i.e., to sell off the crypto asset at market price to pay off the loan amount.

However, if the deposit amount has been affected due to a drop in cryptocurrency the borrower is sent a warning message narrating the deposit amount to be insufficient. In such cases, the crypto exchanges or crypto lending platform ask borrowers to deposit sufficient funds, pay off a part of debt [partially or fully] or sell part of the crypto asset to repay the remaining debt.

Crypto Loans reducing Margin Call Risks

The borrower can also reduce the risks of a margin call by smartly choosing the ratio of deposit and loan size. With a smaller loan amount value, less impact to the price fluctuations with lower interest rates and longer loan terms as it reduces loan risks to the lender, thereby saving borrower from the margin call risk.

While for banks defaulters risk is huge, in the crypto world it could be controlled and managed effectively. Crypto loans also offer the advantage of lower processing fees and fast processing. For more details on Advantages of crypto loans, check our post – Advantages of crypto-backed loans.

Crypto lending is one of the easier ways of earning a passive income if chosen wisely. It is also considered a common alternative to investors who are inclined towards crypto trading but could not find enough time to practice it daily.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

Bitcoin Loans – Indian Industry in dilemma

While Indians are still searching for the best interest rates, a new offering from the crypto world has knocked India – Loans against crypto assets or crypto loans.

News.Bitcoin.com surveyed players in the industry, and their responses can be categorized as skeptical. Abhi Upadhyay, from the mobile lending space, says – “Traditional financial institutions like banks are never going to come close to accept cryptocurrency as security.”

Manav Jeet, Founder, and CEO of Rubique, a prominent fintech player in the digital space – We are the best-regulated markets, and even in terms of awareness, only a tiny portion of Indian population is using cryptocurrency. It will take a lot of time for us to get to the stage where we can imagine this form being used in secured loans.”

While in terms of Fintech adoption India has exhibited the second highest fintech adoption rate (59% while the global average is 33%) as per the EY Fintech adoption index, but Bitcoin loans as Saurabh Shankar, head of marketing at Paysense says – conceptually the idea is not bad, but the practical side here revolves around regulations and actual ease.

Read more at News.bitcoin.com


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Gold as Collateral in Crypto Loans Market

Gold has been a precious commodity for most of the investors, while experts argue there have been reports that Gold protects user’s financial portfolio from volatility as there is an inverse relationship between gold and equities. Gold is also widely used as collateral in the Debt market, and with the push of innovation, now borrowers in the crypto lending community could use gold as collateral. Let’s explore a bit more on this –

The Crypto Lending Using Gold as Collateral

Conventional Lending has been a cumbersome and tedious job, as individual raise a request to the Bank or NBFC ’s, Banks explore the user’s credit score, verify personal and financial details and then the loan is sanctioned. Crypto Lending, on the other hand, does not need to verify your economic status, based on the collateral value the loan amount is fixed and released at a predefined interest rate. While earlier tokens were used as collaterals, quite recently Gold has been used as collateral by the crypto-backed loans platform.

How Gold as Collateral works in Crypto Loans?

The borrower could submit a loan request and deposit the gold in the wallet provided by the Blockchain lending platform. Here there are two types of service providers, one where the platform connects the borrowers/lenders from across the world and second where the platform itself act as a lender. So in the first case, once the loan request is made, and if a matching application from a lender exists, the loan could be issued promptly, or otherwise, the request sits on the dashboard unless an apt funder is found. In the second case, the loan amount either in the form of cryptos or fiat is issued and transferred directly to the bank account or a crypto wallet.

Once the repayment of the principal amount is made, the borrower can get his Gold collateral back. Mostly there are no prepayment charges applied by the lending platforms and have fixed interest rates.

The Lender and borrower are under an agreement made by smart contracts, to prevent either party from relapsing on the agreed terms.

Why Gold as Collateral in Crypto Lending?

By using Gold as collateral, the blockchain lending platform is raising the possibility of including other tangible assets like precious metals, real-estate, etc. Also, Gold as collateral has been existing since olden times, and individuals still include Gold among their financial portfolio as a diversifier or as a hedge in case inflation is peaking so then why not take its benefits in crypto markets as well?

What are the Risks Associated with Gold loans in Crypto Market?

Gold loan is classified as a secured loan because it’s an asset-backed loan where mostly lenders do not have to worry about defaulters and Gold is a universally accepted commodity. Hence lenders are making a safe bet. However, the borrower might have to worry about the crypto prices since it’s a volatile market with not much regulation.

Firms Offering Gold Loans in Cryptosphere

ETHLend has listed the gold-backed cryptocurrency, the Digix Gold token (DGX), on its platform; enabling borrowers to use gold as collateral effectively for blockchain lending.

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Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

 

Five Things You Need To Know About Crypto Loans

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans, what are the different types of crypto loans, advantages of crypto-backed loans, Risks associated with crypto lending, crypto lending platforms in US, Crypto Lending Platform in UK and Crypto Loans platform in Europe. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would talk about five things you need to know about crypto loans.

Crypto Loans – Five Things You Should Know

Crypto Lending Platform are operational 24*7

Yes thanks to the nature of the services, the lending platform is operational 24*7. Most of the platform connects the lenders and borrowers from across the globe, making them operational 24*7. Unlike loans offered by banks or NBFC’s in the countries, the crypto lending market is a digitized platform where individuals could register from any part of the world.

 

Get FIAT against a crypto collateral

One of the beauty of crypto loan is the new business model that offers Fiat currency loan against crypto collateral. If users have cryptos in their wallets which are lying idle and he is in need of cash, a crypto loan with fiat model is the best bet. The lending platform offers secured wallets that could be used to deposit your crypto collaterals, and the loan amount could be issued within 2~24 hrs directly to your bank account, depending upon the platform policies.

 

Crypto Loans are only for RICH or millionaires

While Home loans, Car loans may be for the affluent community, crypto loan market offers microloans of even 50USD depending upon the platform you choose. Yes holding a financial portfolio of cryptos like bitcoin, Ethereum or Altcoins might be a game for millionaires, but the crypto lending market is open to all investors.

Crypto Loans are not regularised

While cryptocurrency itself is banned or restricted in many countries, many regions do allow the exchange to operate. However, the license and registration of a lending platform can be obtained in the US by the U.S. Securities and Exchange Commission (SEC) or in Canada the Ontario Securities Commission in Ontario. Even France and UK authorities, i.e., the Autorité des marchés financiers and the Financial Services Authority in the UK assist in providing a license to the P2P lending platforms.

Reg crypto to cash loans, there are a number of legal formalities and prove yourself worthy of maintaining a legal payment institution regarding financial stability, security or legality and then get a license to work as a lending platform.

 

Assets are unsecured, and returns are uncertain

All investments are subject to market risk, and most of the investment that fails [in crypto or non-crypto domain] is due to ignorance of the investor. Financial education is of utmost importance while making any investment, so in the crypto loan, the investor should be well aware of the volatility of the market, the offerings and the conditions that could lead to being a defaulter.

For the lender to mitigate risks associated with the cryptocurrency volatility, the lending platforms fix the collateral ratio from 10~70%. So the level of risk varies with each participant.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

Crypto Loans Platform in Europe

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans, what are the different types of crypto loans, advantages of crypto-backed loans, Risks associated with crypto lending, crypto lending platforms in US and Crypto Lending Platform in UK. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would talk about different crypto lending platforms in Europe.

The two firms from Europe – Ethlend and Nexo are making much noise in crypto communities. While each one differs in the way their business model work, they have been working hard to capture the customer base and innovate crypto-backed loan space. Let’s take a closer look –

Crypto Lending Platforms in Europe

Ethlend

Ethlend facilitates decentralized lending on the Ethereum network. Ethlend lending works by lending Ether units and not by lending fiat currency. Also, Ethlend loans are backed by collateral as ERC-20 tokens and not Ether or bitcoin. They accept all kinds ok token like Vibe Coins or OmiseGO or Golem to name a few.

For a borrower on the Ethlend platform, he needs to deposit his ERC-20 token and lenders need to deposit their ether. Then Ethlend contracts make the switch and loan have started. The borrower now needs to pay the interest amount in Ether, failed to do so provide the lender a right to claim the deposited collateral.

Nexo

Nexo using blockchain technology provides loans directly to the borrowers. NEXO itself provides the funding, so you may not might additional lenders on their platform.

Nexo offers loans outside Europe in USD and EUR with no credit scores check. The borrower could also repay the loan amount using USD, EUR, Bitcoin, Ethereum or Nexo Tokens[the first SEC-approved security token]. One of the advantage borrowers receives while using Nexo token is a discounted interest rate. Nexo token holders also get a dividend as a percentage of the firm’s profits. While dividends, discounts may be overwhelming for the borrowers being SEC approved they are risk averse

Crypto Lending App Lndr by Blockmason, Adds PayPal Integration

Blockmason a firm from the US that launched an application Lndr an expense sharing app is integrated with Paypal. The A distributed mobile app built on Blockmason’s Credit Protocol, a foundation for recording debt and credit obligations on the blockchain is keen on expanding its reach would allow its users to settle their loans on the platform using Paypal. Users can use a total of 20 fiat currencies and ETH on the platform. The CMO of the firm says that they are exploring the options of cross-currency transactions, so one person could send ETH and receive USD.

However it’s essential to know Paypal is not having a partnership with the firm Lndr, they are using open API for integration.

Read more at bitcoinexchangeguide

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Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Crypto Lending Platforms in UK

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans, what are the different types of crypto loans, advantages of crypto-backed loans, Risks associated with crypto lending, and crypto lending platforms in US. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would talk about different crypto lending platforms in UK.

A quick look on Google Trends for the term crypto loans indicates the growing interest of individuals, enterprises, and customers. The trend also suggests an opportunity for enterprises to tap onto and come up with innovative solutions, just as the startups from the UK are pioneering the art of crypto lending.

Google Trends - Crypto Loans
Google Trends – Crypto Loans

Crypto Loans Platform in UK

Kambo

Kambo values your crypto and offers blockchain based loans for long-term hold with an easy supply of cash. The company established in 2010 intended to provide individuals with cash without selling their cryptos. They have their offices in 18 countries and allow customers to avail loan against Bitcoin and Ether.

Their working model is simple where the user needs to sign up and specify the loan amount and submit the application. The borrower needs to transfer their cryptos on to the Kambo secured wallets, and within an hour 50% of the blockchain assets market value would be deposited into your bank account.

 

 Nebeus

Nebeus, a startup from London offers Loans by using Bitcoin as collaterals; they also have a Loan Calculator that could help you in analyzing the ROI of the investment made. The loan is usually dispersed within 24 hrs after submitting the loan request and could be availed by customers outside of the EU. It also provides users with the opportunity to have fiat loans against BTC and ETH for 20% interest rate. Nebeus also have other offerings like  Nebeus Prepaid card that allows the customer to use the card to get instant access to your crypto. You can also withdraw cash through ATM or pay in any shop. They also have a Digital Exchange that facilitates buying and selling of cryptocurrencies

Celsius

Celsius another start-up from UK  allows its customers to deposit BTC, ETH, LTC into a mobile wallet and earn a regular interest. In case the person is in need of cash, he could also opt for a crypto loan in Dollars where your cryptos are used as collateral.

With a tagline Crypto for the people, the interest earned via loans is redistributed to its HODlers in CEL token within the Celsius network

Ripio Expands its crypto lending platform across Latin America

As reported by Coindesk – Ripio an Argentinian startup is offering peer to peer microloans to all of its 200,000 bitcoin wallet users in Argentina, Mexico, and Brazil. Ripio mentioned it has 3,000 lenders on the marketplace issuing loans for up to $730.

The distinguishing feature of the Ripio lending model is that Ripio offerings are available to unbanked crypto users. Although the startup doesn’t have data on how many unbanked users are on its platform, a survey of 1,000 Ripio users revealed 19 percent didn’t have a credit card. They often fund their wallets by depositing cash at convenience stores that partner with Ripio.

Read more at coindesk.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

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