Are Crypto Loans Coming in the Future?
With the increase in interest in cryptocurrency, it was only a matter of time before we started to see this type of currency involved in a wide range of different types of transactions. This even includes crypto loans. Some have wondered if we will start to see these types of loans at some point in the future, but the truth of the matter is that they are already here.
When cryptocurrency started to enter a lull in 2018, many people were not willing to give up on it. They still wanted to keep their cryptocurrency, but they would sometimes also have a need for some fast cash. This need created a brand new type of loan, known as the crypto loan. With this type of loan, you would be able to put down your cryptocurrency as a form of collateral. Then, you can get the money you need.
This means that you don’t actually have to wait for the future to get a crypto loan if you need one. They are already here and they are available through a number of different loan services. In the past, peer-to-peer lending was possible, but now things are changing.
Companies Offering Crypto Loans
SALT is one of the most well-known and popular of the programs that offer crypto loans. These blockchain-backed loans do not require any type of credit check. The users will purchase ERC20 SALT tokens to become a member of the group, and then they will put up their Bitcoin or another type of cryptocurrency as collateral. At that point, they will be able to start borrowing money from the lenders who are working with the platform.
As soon as the loan is paid back, the borrower will receive their cryptocurrency back. One of the nice bits about borrowing from SALT is that there are not any prepayment penalties, which you may have if you were borrowing traditionally.
A caveat of SALT is that they do not guarantee that there will be enough liquidity available for all of the loan requests right away. This is true even for borrowers that have been approved. If all of the money in the lending network has been lent out, then it means that the borrowers will have to wait for more lenders to enter the system, or for money to be paid back. The loan to value ratio is 60%.
Another one of the options available today is called Unchained Capital. This service works similarly to SALT. The short term loans are between three and 24 months, and there are options to renew. It is possible through Unchained Capital to borrow up to $1 million without needing a credit check. The loan to value ratio is 50%, which means that for every dollar that you borrow, you will have to deposit $2 as capital.
EthLend is a third option to consider. This will allow the lenders and the borrowers to connect through their platform and then negotiate things like the duration of the loan and the interest rate. The program is based on Ethereum. If the borrowers do not abide by the terms of the contract, it means that their collateral is forfeit.
As you can see, there are already crypto loan options available. You can be sure that in the future, there will be even more of these types of loans available through many other companies. More and more are cropping up all the time. Those who have cryptocurrency, and who need some fast cash might want to consider this option for a fast loan.