Why Borrowing Against Crypto Is The Ideal
There are many forms of loans that one can take.
The average person is often bombarded by salesmen promoting one type of financial product or the other. There are so many loans that are available to the consumer that at times they are spoilt for choice. Some of the securities used as the collateral include stocks, property and vehicles. There is a new platform for lending that is ideal to the borrower which is the use of crypto as the security. This article will show why borrowing against crypto currency is the new ideal for the discerning consumer.
When you consider the typical bank loan, it takes close to 45 days to be approved. This starts with the day you forwarded your request to when funds are credited to your account. The process includes obtaining a credit report and checking other information on your financial transactions before verifying your credibility. This is a downside for a person who has an emergency and needs the loan approved quickly. Crypto currency offers the ideal as it shortens the loan process time by more than half. Depending on how much one is borrowing using their currency as a security, the funds can be availed instantaneously or in two weeks at the most. There is no background check based on credit reports. This is because the value of your crypto currency is the most important determinant of the loan amount you will get. This is inuenced by the fact that crypto currency is real currency and not “for bearer” when compared to other traditional currencies.
The lending on crypto currency attracts lower rates of interest on the loan when compared to bank loans. This is because the digital currency lending platforms are relatively more stable and are not subject to wide variances in value. Lending against a security that is stable allows lenders to reduce the interest rates to the advantage of the borrower. The borrower is therefore able to access cheaper loans while the lender gets profits by lending on volume. Crypto currency lending is normally crowd sourced globally and this widens the lending base on crypto currency.
Once your typical bank loan is approved, the funds are credited into your account with the same financial institution. This constrains the borrower who may wish to borrow in country A and spend or invest the loan proceeds in country B. Crypto currency allows the borrower the latitude and freedom to choose where they want the money to be wired. Using payment systems such as PayPal, one can have their loan proceeds wired to any country of their choice.
The above are just some of the benefits of using crypto currency as the security while borrowing. The exibility of where to wire the money and the ease of processing are clear benefits that are attendant of borrowing using crypto currency, making it the new ideal.