Advantages of Crypto-backed loans

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans and what are the different types of crypto loans. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would be targeting the benefits of crypto-backed loans or crypto lending.

Involving blockchain technology into lending could make the product offerings cheaper, faster and much more transparent to borrowers and lenders. Transactions powered by Blockchain are instantaneous and indisputable, that also comes along with – no transaction fees clause. Fundamentally,  leveraging blockchain technology with peer-to-peer lending offers following benefits –

Negligible Transaction Fees

Under the P2P lending process, when a borrower initiates the loan request, it goes to a bank/financial institution’s that charge you fees for processing, documentation, or early payment charges, that was mostly applicable to the borrower. If we refer to Processing charges by Banks in India, it could go up to 20000 INR, on the other hand, crypto-backed loans do not have any processing or transaction charges. Only if you are using the platform [like Nexo, Nuo Bank, Ethlend, etc.], they might be charging you with a small amount. So crypto-backed loans come with a value of money when compared to P2P loans

No Paper Work or Need of Bank Accounts

While opting for Crypto-to-Cash loan you may need a bank account, but otherwise, there is no need of any paperwork or bank account while picking a crypto-backed loan. It also helps in targeting the individuals at the lower level of the pyramid, which is unbanked and cannot provide the required KYC documents.

No Boundaries, Loans Diversified

P2P lending mostly works in restricted geographies’, however, crypto lending could open gateways to cross-border lending, offering diversification to both lenders and borrowers. Crypto-backed loans offer an opportunity to the lending community to diversify their portfolio across different continents and countries. While lenders can take advantage of cross-country diversification, borrowers get a global pool of lenders. A win-win for both.





Different Types of Crypto-backed Loans

Our last post spoke about the differences between the peer to peer lending and Crypto lending if you didn’t get a chance to check here is the link. Taking a step further today we would talk about different types of crypto-backed loans available in the market.

The crypto assets market is still in evolving phase, and earlier where the crypto world only witnessed holders and miners as the market participants, another group emerging in cryptosphere of – issuers, investors, lenders, borrowers demanding exotic flavors in lending services. The flavors available now are in a basic form that allows holders of crypto assets to generate income from interest earned.

Types of Crypto-backed loans

Crypto-to-Crypto Lending

The arrangement works for people who have spare crypto and are not using at any time. Just lend your Bitcoin or Ether, or Altcoins agree to the smart contract and earn an interest rate for a given period of time. It helps users or businesses to earn extra cryptos just by lending it.

Firm offering Crypto to Crypto Lending – Coincheck, Lending Block, Nuo Bank

Crypto-to-Cash Lending

The model works with businesses/users who are holders of cryptocurrency and in need of Cash. So the cryptocurrency like Bitcoin, Ether or Altcoin work as collateral and the user gets the cash in hand. The cash amount is usually credited to the bank account linked, the borrower needs to make monthly payments and once the amount is fully paid the collateral is reimbursed.

Certain kind of conditions are applicable in case of Crypto to cash lending like in case if the collateral price is dropped by a specific percentage say 25-30, the lending service platform can request for more capital.

Firm offering Crypto to Cash Lending – Unchained Capital, SALT Lending

Margin Funding

It is a unique service offered currently by Bitfinex, which allows individuals/users to fund in multiple currencies to Bitfinex traders. The interest rate, duration could all be decided by the individual who is funding it.

In such case, a user could earn a passive income by lending USD/cryptocurrency depending upon the trade volume and price at a given time.

Firm offering Margin Lending – Bitfinex, Nuo Bank [Launching Soon]



Bitcoin, Asd,

Ethlend vs Salt: Which is the Better Crypto Lending Platform

The new entrants that entered the crypto lending arena towards the end of 2017, are about to complete a year of operation. So how do they stand in the evolving market – SALT vs ETHLEND. Coincentral compared the two startups in the category of What is Ethlend and What is SALT, the benefits of each and some of the potential risk involved.

Do take a closer look at coincentral.

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.

Up ↑