SpectroCoin is bringing crypto lending to the mainstream. You don’t have to sell your crypto to get cash. At SpectroCoin, use your favorite crypto as collateral to get loans in cash, crypto or stablecoins.
SpectroCoin is an all-in-one solution for cryptocurrencies. It has been serving the needs of blockchain enthusiasts ever since the dawn of cryptocurrencies. Our services include a wide selection of cryptocurrency solutions, ranging from exchange to e-wallets.
The Rise of Crypto Lending
In the early days, digital currencies were highly speculative. However, times are changing and ownership of these assets are now viewed as a means of accumulating wealth through capital gains. More and more publicly traded companies are getting into crypto, especially Bitcoin and the adoption of these assets are growing rapidly. It seems that the future of crypto is extremely bright. Highlighting the growth of crypto is the rise of lending platforms.
ABC's of Crypto Lending
Crypto loan platforms like SpectroCoin allow users to deposit their digital assets as collateral and take out loans in crypto, fiat currency or stablecoins. Considering how volatile the crypto market is, most of these loans are over-collateralized. Depending on the amount of loan, the borrower is required to deposit their collateral and lock it to secure the loan.
In short, the process is like this:
- Transfer your crypto.
- Choose your loan terms.
- Get the loan in cash/crypto/stablecoins.
- Keep your crypto secured for growth.
The benefit of crypto lending is very simple - you get the financing that you need for your needs while keeping the crypto for growth.
Bringing Crypto Lending to the Mainstream
SpectroCoin is bringing crypto lending to the mainstream and supports more coins beyond ETH and ERC-20 tokens. The platform lists several coins and fiat including the Euro, BTC, ETH, USDT, BNK, XEM and DASH. A solid addition to the variety of crypto-assets supported as collateral and your loan withdrawal currency will be delivered shortly.
Users can also borrow from as low as €25 to €1 million with options of withdrawing using the Euro or any of the supported cryptocurrencies including BNK, BTC and others. Once a loan is approved, it is disbursed to the borrower’s account.
From the homepage, users can also select interest rates to be paid in Banker Token (BNK). Using the BNK token draws lower interest rates. Also, customers can earn and save using the BNK token. Interest payments are automatically debited every month while the loan is repaid manually on the platform.
Loan-to-Value (LTV) For Risk Management
Clients can borrow up to 75% of their collateral’s value. The Loan-to-Value (LTV) ratio at SpectroCoin is between 25 to 75.
The higher the LTV, the riskier it becomes for the crypto lending platform but the higher the loan a customer can borrow using their crypto collateral.
Crypto lending platforms like SpectroCoin don’t perform background and credit checks and anyone can borrow. Therefore, as they issue out loans, LTV is used as a risk management tool and estimates the value of the collateral a borrower must deposit to be granted a loan.
As an example, if a user wants to borrow $500, he/she must deposit $1,000 worth of crypto as collateral if the LTV is 50%. The LTV is frequently updated to reflect the state of the market. When there is a misalignment, the borrower is required to deposit more collateral, pay off a portion of the loan balance from the available reserves in the wallet or repay part of the loan by selling the cryptocurrency deposited as collateral. Failure triggers an automatic partial liquidation of the collateral to sustain a healthy LTV ratio.
Borrow at Rates as Low as 4.55% APR
In SpectroCoin, the lower the LTV, the lower the interest, and the more coins there are supported as collateral. For example, a borrower wishing to withdraw over €5,000 in loans at a 50% LTV can deposit either BTC or ETH as collateral and pay an 8.95% interest (when interest paid in BNK). Borrowing the same amount with a 25% LTV draws the interest to 5.25% with several assets available as collateral including ETH, BTC, DASH and XEM. However, SpectroCoin plans to add more.
At the moment, SpectroCoin offers crypto loans at rates as low as 4.55% APR and no hidden fees or prepayment penalties.