The Future of Lending: Crypto-Backed Loans
The emergence of the blockchain and crypto industry remains a driving force behind an entire range of innovations that are looking to merge the technology of today with the traditional finance industry.
The lending industry has felt the technology’s most significant effects. The idea of allowing crypto owners to collateralize their assets has come a long way in only a couple of years. As of now, the crypto-based lending market is worth almost $5 billion.
Unsurprisingly companies offering crypto-backed loans are bursting onto the scene everywhere. The popularity of the service seems only to grow. So let’s dive in and have a better look at how crypto-based lending works and what should be the key points to consider before signing up with any of the services.
Bankera Crypto Loans: Pushing the Envelope
Financing is crucial in today’s world that revolves around consumption. While banks have dominated the lending space and dictated the general conditions of obtaining loans, the advent of blockchain brought the concept of decentralization. Today, crypto holders can use their Bitcoin or altcoin assets to obtain loans under favorable conditions.
Last year, Bankera launched its crypto-backed loans platform — Bankera Loans — in an effort to provide users with quick, flexible, and accessible loans for cryptocurrency holders of all levels; the company does so by offering an entry limit of only 25 EUR. For comparison, most of the competitors offer loans starting at around $500.
One of the many great things about Bankera Loans is that they offer one of the highest loan-to-value (LTV) ratios; an LTV is a ratio between the loan amount and the collateral market value. Simply put, an LTV ratio determines the amount of collateral you will need to put forth to secure the loan: lower LTV means larger collateral and vice versa.
At Bankera Loans, the upper LTV limit sits at 75% while the industry standard lingers around 50%. To address the varying needs of its customers, the company offers three loan packages:
- Lowest rates: 25% LTV. Rates from 6.95%;
- Most popular: 50% LTV. Rates from 9.95%;
- Max LTV: 75% LTV. Rates from 12.95%.
Quick Approvals and Lots of Flexibility
The whole procedure to obtain a crypto-backed loan is simple, quick, and intuitive; pretty much the antithesis of traditional lending solutions. Since you are not required to go through lengthy credit checks, all you need to do is sign up for services and apply for a loan.
Bankera Loans users who go with the Most Popular or Max LTV packages only have BTC and ETH as collateral options. Those who choose to go with the Lowest Rates package can deposit collateral in BTC, ETH, DASH, as well as XEM.
As for withdrawals, the platform supports a number of cryptocurrencies such as Bitcoin (BTC), Ether (ETH), Tether (USDT), NEM (XEM), or Dash (DASH). Also, if you are looking to withdraw in fiat, you can easily make a transfer to a Euro bank account.
As standard practice loans are issued for one year; however, you can repay the credit anytime before the deadline without incurring a penalty of any sort. An additional perk is that Bankera Loans allows extending the period if it is not met.
Finally, users can also choose to repay the credit with Bankera’s native token – Banker (BNK). Anyone who decides to take this route will be rewarded. Bankera Loans will lower interest rates for anyone using their token.
Note that the platform will soon introduce a referral program that will help you earn 10% of the interest paid by the people you refer to the platform.
As more and more crypto-based lending solutions are about to burst into the market, making the right decision will become the central issue for the average user. To make the best decision possible, be sure to think about the LTV ratio, interest rates, repayment schedule, as well as customer support services before even signing up for the services.
Bankera Loans, while a relatively new platform on the market is a genuinely solid alternative to any established players in the industry. With its varied package options, quick approvals, and a flexible repayment schedule, it caters to the neediest of needy.
Disclaimer: The information presented here does not constitute investment advice or an offer to invest. The statements, views, and opinions expressed in this article are solely those of the author/company and do not represent those of Bitcoinist. We strongly advise our readers to DYOR before investing in any cryptocurrency, blockchain project, or ICO, particularly those that guarantee profits. Furthermore, Bitcoinist does not guarantee or imply that the cryptocurrencies or projects published are legal in any specific reader’s location. It is the reader’s responsibility to know the laws regarding cryptocurrencies and ICOs in his or her country.