No credit card score required – Instant Loan by Cryptocurrency!

Today, the crypto market is buzzing with the new phenomenon currently taking place known as “Crypto-to-cash lending.” This new model is growing exponentially and follows the modern rise of the peer-to-peer lending system, which is offered by various financial giants in recent years. Currently, few operations are trying to break the mold when it comes to crypto backed loans.

While there may be different crypto backed loan providers, there is a new startup known as InLock, which plans to provide instant loan by cryptocurrency to borrowers without checking their credit. InLock believes it will be the first crypto loan platform to offer instant crypto loans to its customers. Crypto-to-cash lending is a trending business model with the popularity growing exponentially because of the benefits of acquiring loans without credit checks. There are predictions that many startups planning to venture into the crypto-to-cash lending system are going to be vibrant.

While crypto backed loans are profitable for both lenders and borrowers, it comes with certain risks. The truth is no technology is foolproof, which is why in spite of the advantages of crypto loans, there are still risks associated with it. These risks can be mitigated especially if you are an informed person. The following are risks of crypto lending.

Platform Safety

The lender or borrower in crypto lending is connected through two kinds of platforms. First is the firm that offers the software solutions, which connects the borrowers and the lenders. It is important to know the security aspects of this platform. You should find out if the data has been hacked before? Has there been a breach in the past? Furthermore, find out security measures put in place in case of hacking. The second platform is the online cryptocurrency community where lenders and borrowers interact with each other directly. Because it is an independent contract signed by the lender and borrower, there are fewer chances of any support in the case of any dispute or scams.

Instability

The crypto market is an unstable or volatile market that runs throughout the day. The borrowers or lender may suffer some setback especially if the money borrowed or repaid has dipped during the day. Actually, many investors may consider seeing the value of an asset depreciate to a certain point where the debtor is better off defaulting than paying back the loan.

In spite of these risks, we cannot undermine the benefits of crypto-backed loans. The following points clearly depict the fact that crypto loans are great.

Negligible Transaction Fees

Unlike our traditional loan banking system where when a borrower initiates a loan request, it goes through the bank or financial institution. This institution than charges the borrower for the processing, documentation, and other payment were applicable to the borrower. However, crypto backed loans are different because they don’t have processing or transaction charges attached to them. But some crypto backed loan platforms like InLock do charge a token; generally, when compared to peer-to-peer loans, crypto loans come with a value of money.

No Paper Work Required

With the option for crypto-to-cash loans, you may require a bank account; however, no paperwork is required for this process neither do you need a bank account when picking a crypto loan. This characteristic of crypto backed loans helps in focusing on those who are unbanked and cannot provide the needed KYC documents.

No Restrictions, Loans Diversified

Peer-to-peer lending works perfectly in geographically restricted areas; nevertheless, crypto backed loan opens up a gateway for cross-border lending, which offers diversification for both borrowers and lenders. Crypto loans offer an opportunity to the lending community to spread their portfolio through various countries and continents. Crypto backed loan is a win-win situation for both lenders and borrowers because of the advantage of cross-country diversification.

The post No credit card score required – Instant Loan by Cryptocurrency! appeared first on Bitcoin Garden.

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