Why Should You Get a Loan secured by crypto?
Lending is traditionally considered a banking domain. However, since the advent of cryptocurrency and blockchain, many more lending options have come to the fore. Now you can get a fiat or USD/USDT loan using your cryptocurrency as a collateral.
So why should you discard the old ways in favor of a new alternative? Why should you choose a cryptoloan over a traditional bank loan?
Avoid Selling Crypto to Get Fiat
Sometimes you need fiat, and you need it fast. You might want to buy real estate, cars or simply have some pocket cash. Although selling crypto may be your first thought, it may not be far-sighted, especially if the current price is not in your favor. It would be way more beneficial to take a USD/USDT loan secured by your crypto and pay little interest on top than to risk losing the value of your digital currency.
Benefit from the Cryptomarket Volatility
Apart from buying stuff, you may want to use fiat to buy more crypto. It is especially relevant for those involved in exchange and trading. When the price of your favorite cryptocurrency slumps, you may need fiat fast to buy it before the market takes yet another abrupt turn. This is where P2P lending is quite handy, as it is much more expedient than getting a traditional bank loan.
Act Fast in Case of Emergency
When tragedy strikes, there is no time for the bank’s red tape. Getting a cryptoloan will protect you from numerous clerks, papers and meaningless procedures. Because blockchain technology that supports cryptocurrency lending is inherently secure, you do not have to deal with intermediaries to prove your identity and reliability.
Keep Your Credit Scoring Intact
Getting a loan from the bank may negatively impact your credit standing. This does not apply to the P2P lending platforms. When you get a cryptoloan, your credit scoring remains intact, even if you fail to pay it off. What is more, even individuals with no credit history can get a cryptoloan, which opens up numerous investments opportunities.
Do Not Pay More Tax
When you sell cryptocurrency, you have to pay tax. When you borrow USD/USDT, you do not have to pay tax. Which option do you like more? Even if you say that taxes will be lower than interest and transaction fees, you should not forget about cryptocurrency volatility. It would be a shame to sell your coins right before their price starts growing exponentially.
Diversity Your Investments Portfolio
For effective crypto asset management and risk mitigation, it is important to have a diverse investments portfolio. Getting a cryptoloan will allow you to do just that. Do not put all your eggs in one basket. Get USD/USDT loans and use them to buy multiple cryptocurrencies while the prices are low. By having different coins, you safeguard yourself from market volatility.
Forget About Never-Ending Bureaucracy
The absence of bureaucracy is the most obvious benefit for people choosing a cryptoloan. Unlike traditional banks, P2P lending platforms do not require its users to jump through a thousand flaming hoops for their loan to be approved. Cryptoloans are powered by blockchain, which provides for almost immediate authentication and lending.
Enjoy Increased Safety with a Flexible Loan
Cryptoloans are flexible, which ensures a better safety for both investors and borrowers. Let’s say you used 1 BTC to collateralize a loan of 3,500 USD. If the BTC price goes up, a borrower may get some of their crypto back on their wallet. If the BTC price goes down, a borrower will need to send more crypto as collateral. It is a fair system for both parties.
Get a Loan on Your Own Terms
Many P2P platforms allow its investors and borrowers to form agreements on their own. Parties submit their unique loan requests/offers and wait for the right person or business to come along. This way neither lenders nor borrowers have to follow the arbitrary rules imposed by an intermediary. They can strike truly unique agreements that satisfy both sides.
Take Advantage of P2P Lending Liquidity
Because P2P lending is not limited by geographical borders, it involves more participates which in turn guarantees a higher liquidity. You are more likely to find the right investor or borrower than in a pool curtailed by bank policies and regulations. What is more, you can check their transaction history and feel assured of their financial integrity.
P2P lending is still a new phenomenon in the world of finance. However, when you consider all the benefits, it is easy to see how one day getting a cryptoloan would become mainstream.
Join the future. Get a loan with LendaBit.com.