The cryptocurrencies journey was no less than a roller coaster ride that eventually exposed the users to a new wealth system – the Paperless Currency. Since its inception, Bitcoin is considered a storehouse of value that gave it a status similar to gold. The virtual currency was introduced to substitute the traditional payment settlement regimes, but as time passed, Bitcoin showed its true potential in revolutionizing multiple paradigms. This expansion paved the way for new opportunities for the customers helping them pool funds without selling their assets. Bitcoin-backed loans are exciting options that can help you acquire quick funds against their holdings. Bitcoin price reached its all-time high and due to this many investors or people were reaped the profit. Now, Several people are showing their interest in it & if you are also planning to invest in Bitcoin. The Bitcoin Aussie System is an innovative & different way to invest in Bitcoin & it uses an algorithm that auto-trades for people and if you want to know more you can check out Bitcoin Aussie System Reviews.
What is a Bitcoin Loan?
A Bitcoin-backed loan is a simple solution that allows investors to use Bitcoin assets as a security deposit or collateral asset for getting loans from designated firms. They are similar to traditional cash-based loans but have unique features that differentiate from other mechanisms. Bitcoin loans have become quite a thing in the past few years due to traditional banking channels’ cumbersome processes.
Bitcoin’s dynamic nature and high liquidity potential make the currency a hotshot option for the collateral market. These loans are known by different names like ‘Bitcoin Backed Loans,’ ‘Bitcoin Loans,’ or ‘Bitcoin Collateralized Loans.’ The names can vary, but the main driving force behind them rests in the truth that ‘Bitcoin is a store of value and can be used as collateral like gold for a loan.’
Why choose Bitcoin Backed Loans?
- Bitcoin works on its native blockchain channel and does not rely upon a central authority or banking institution. When taking a Bitcoin loan, the borrowers do not have to take the pain of time-consuming interaction with banks and governing authorities.
- The currency is highly liquid. This means that you can liquidate your assets quickly whenever you need money for use.
- There are fewer credit checks, so it can be a good option for someone who does not meet the standard credit requirements of the traditional systems. Bitcoin portals emphasize on your online payment history rather than your credit history.
- The interest rates charged by Bitcoin lenders are comparatively lower and less complicated too. The borrowers get their funds instantly.
- As everything is stored on the Bitcoin blockchain, there are hardly any chances of modification or security breaches of transactions for both the involved entities.
How do Bitcoin Loans work?
- Create an account and complete the registration details of the lending firm. Submit the loan application.
- The lending portal gives a loan agreement to the requestor, which is to be signed by them and submitted duly.
- The borrower is allotted a bitcoin address in which they will deposit the loan collateral.
- One sends the bitcoin to the address given by the firm.
- The loan portal confirms the receipt and gives the loan to the borrower quickly.
How to get Bitcoin loans?
- The various factors governed by the lending portal include:
- Government-issued ID card
- Online payment accounts verification (PayPal or eBay)
- Income and address verification
- Social media profiles check
- Credit Card Detail verification
Platforms that offer Bitcoin Loans
- BlockFi – BlockFi is a leading lending firm that raised more than $60 M in VC funding. The firm offers loan facilities in Bitcoin, Litecoin, Ethereum, and stablecoins. It helps investors to earn interest on their assets as well.
- YouHodler – The portal supports more than 12 stablecoins along with BTC, ETH, and other crypto coins. YouHodler is highly competitive and secure. It gives a high-interest rate against stablecoins.
- CoinLoan – CoinLoan supports crypto coins, stablecoins, and altcoins for lending purposes and good returns.
- XCOINS – It deals in BTC only while the interest is transferred to PayPal in Fiat currency chosen by the user.
- BTCPOP – The portal gives lending services against BTC and over 180 altcoins, spoiling the investors for choice.
Cryptocurrencies are in their nascent stage in the lending sector, and so a majority of investors remain skeptical about blocking their funds as collateral. They fail to understand that Bitcoin is not a payment system but a currency that stores value for the holders. By relying on a good crypto lending firm, crypto fans can use their assets to get quick loans for their capital in a secure way.