The advent of blockchain and cryptocurrencies has changed the financial industry overall. One of the most exciting phenomena that today represents the immense potential of blockchain technology is the emergence of the crypto-secured credit industry. For those not in the industry, crypto-based loans offer the opportunity to use their digital assets to borrow both fiat and cryptocurrencies.
That sounds like a relatively simple idea, but currently the crypto-secured loan industry is worth nearly $ 5 billion. The rapid growth of the market could indicate that it may become an integral part of the entire loan industry and maybe one day it may even overtake the well-established solutions.
Crypto-Secured Loans – How Does It Work?
The whole idea of a crypto-secured loan isn’t too complicated. Loans are made possible by smart contracts. They will be listed on the blockchain network once the details of the agreement are processed. Simply put, crypto-secured loans are designed so that someone who owns cryptocurrencies can hedge them and get a loan in return. It’s a great way to use your digital assets.
In most cases, companies that offer crypto-secured loans offer their users a variety of options when it comes to cryptocurrencies. For example, Lite Lender Loans, a new and solid competitor on the market, supports popular tokens such as Bitcoin (BTC), Ether (ETH), Dash (DASH), NEM (XEM) and Tether (USDT).
What you should know before taking out a crypto loan
As the number of services offering crypto-secured loans increases, deciding which provider to go to could be a difficult task. Not surprisingly, there are a number of things you should consider before taking out a crypto-secured loan.
As a rule of thumb, before you take out a loan, you should check the ratio of the loan to its value as it determines how much or how little collateral you need to provide to secure the loan. Also make sure that you learn as much as you can about the repayment schedule and the various ways to repay the loan. Finally, please familiarize yourself with the interest rates and find out what the minimum starting limit is, as this is often a decisive criterion for taking out a loan.
Nowadays, most crypto loan providers offer a minimum starting package of $ 500. This is of course a relatively high price and may not be the first choice for most users. One of the providers who want to change this unwritten standard is Lite Lender Loans. The company is trying to enter a competitive market by offering a minimum starter package for just USD 25; the upper limit is up to USD 1 million. The low entry limit enables the lender to meet the needs of a larger audience.
Another nice specialty of Lite Lender is the variety of loan packages offered. The loan packages offered by Lite Lender Loans serve as a guide:
- Lowest rates: 25% LTV. Tariffs of 6.95%.
- Most popular: 50% LTV. Tariffs of 9.95%;
- Maximum LTV: 75% LTV. Tariffs from 12.95%.
In addition to the great package deals, Lite Lender Loans allow a flexible repayment schedule. By default, the loans are granted for one year. However, the company allows the period to be extended and a new repayment period to be set if necessary.
Without extensive credit checks, a variety of loan packages and flexible repayment options, crypto-secured loans will soon change traditional financing solutions. And so the market will naturally become even more competitive, which will only make things more complicated for the end user.
In any case, Lite Lender Loans is one of the best all-round options due to its versatility in the loan packages, great LTV and interest rates. The company also has a competent and responsive customer support center that is available around the clock. Often overlooked, but excellent customer support services can be of immense value, especially for an inexperienced user.