While the last couple of years positioned crypto mostly on the trading market, the blockchain technology made its presence known in various other fields.
After all, the crypto industry is aiming to make coins and tokens as powerful as any other fiat currency, so it makes sense to develop crypto utility.
On that note, the crypto utility has expanded to online shopping, charitable donations, gift cards and the list goes on. But one of the most important extends was definitely crypto lending.
Cryptocurrency Loans Explained
Getting a cryptocurrency loan isn’t very different from the traditional one, technically:
- You need an amount of money.
- In order to borrow it you send a collateral to the lender.
- You get the loan and then every month you repay a part of the loan, alongside an interest.
- After you repay the loan completely, you get back your collateral.
On the other hand, there are significant differences - crypto loans have a different collateral type, don’t perform background credit checks and have near instant approvals.
Why Should You Choose a Crypto-backed Loan Over a Regular One?
Besides the anonymity provided by working with cryptocurrencies, there are a couple more reasons that make crypto loans better than the traditional ones.
First of all, since you don’t have a third party, it means your withdrawal can be transferred directly to your account. You don’t need to wait for all kinds of approvals, so it’s a way faster method to obtain what you need.
Another great thing about crypto-backed loans is their low minimum. As opposed to banks, you don’t need to borrow thousands of money if you don’t actually need that much. Crypto lending platforms like SpectroCoin have a minimum of just 25 EUR.
And it works the other way too. You are not as limited as you were with banks, so you can borrow up to 1 million EUR if you want. What is important is for you to have a way to repay your loan.
And most importantly – you get your loans regardless of your credit history, salary or marital status. You don’t even need a bank account. Just a crypto wallet you can work with. That makes loans in general a lot more accessible now.
What Can You Use a Crypto Loan For?
If crypto loans were available a decade ago, they wouldn’t have done that much. But since cryptocurrencies are accepted by more and more sellers day by day, there are more possibilities now.
As opposed to banks, nobody asks you the reason you want to borrow money on crypto lending platforms. You can use them wherever your fiat or cryptos are accepted:
- You can finance your own business.
- You can buy your dream house.
- You can pay off your debt.
- You can make investments.
- Or you can simply trade.
It is all up to you. And if you can’t repay the loan someday along the way, don’t be afraid. Just call the support team of the trading platforms – you will figure out a solution together.
Conclusion
The arrival of crypto loans doesn’t just take the crypto industry at the same level with fiat currencies, but it makes cryptocurrencies a better solution for people's needs.
With no rules imposed by a third party, no days wasted and so many possibilities to use cryptos, this will sure make our lifestyle easier and less stressful. So why not give it a chance?