Crypto lending, one of the decentralized finance products, has successfully made lives easier through its fast, handy, and smooth loan services. It may not sound doable, and many people still have their doubts related to cryptocurrency and blockchain, but crypto lending is indeed one of the easiest and finest ways of lending, with the potential to overcome other traditional means, like bank lending and the use of the property as collateral.
Believe us, it is one the best you can get loan services, and in this post, we will dig deeper into the benefits of crypto lending.
Reasonable Fee of Service for Crypto Lending
If you have ever dealt with bank lending, you must know that a good amount of money goes into paying fees for different services.
- Fees for administrations.
- A good amount of interest.
- Even fees for paying your loan before the decided time.
However, all of these charges can be saved using crypto lending services, especially if you choose to use a reliable decentralized finance platform. All you have to do is pay them a little amount for their service, and after that, you can even repay your loan using different currencies without any extra charges. You can check out Mantradao, to know more.
Crypto Lending; an easy to go process
Who would want to go through a myriad of exhausting processes when in need of emergency cash? A long and tiring process of traditional lending is one of its drawbacks. Filling different documentations, giving proofs, going through approval of credit scores, and a long application with proofs is can indeed be very complex. It can take weeks and even up to months.
Crypto lending is made to make this entire procedure super handy for you. No need for proofs, documentation, and a long wait. All you need to have is a considerable amount of coins in your wallet that is used as collateral. These coins can be used for lending at any time, any day.
Supple Terms and Conditions
Flexible terms associated with crypto lending are one of its biggest advantages. Knowing how tough terms and conditions are applicable with banks and other traditional means of lending, crypto lending can better be termed as child’s play. Unlike, bank loans there won’t be any restrictions imposed on the borrower, and he/she will be allowed to spent money for whatever purpose they want.
With that, the borrower also has a full right to decide how long they need a loan, the currency used to repay, and the ratio of a loan to the value of an asset purchased. So what else does one need?
Now when you have looked over various advantages of crypto lending, we hope many of your doubts will be clear, and you too would be considering crypto lending as one of the exceptional lending services.
The Pearls And Pitfalls Of Crypto Lending
If you involve blockchain technology in lending, it could make the transaction far easier and cheaper for borrowers and lenders. So, as you can see, like every other good thing, even crypto trading has also got its fair share of pros and cons.
Advantages Of Crypto Trading
1: Zero Fees For Transaction:
When a borrower initiates a loan request in a P2P lending platform, it goes to a financial institution. Now, the financial entity charges you documentation fees, processing fees, early payment charges, and so on.
But, if you apply for loans in crypto-backed platforms, there are zero fees for transactions. However, if you use platforms like NUO Bank, Ethlend, or Nexo, they charge you a minimal amount, so it is a far better loan initiation platform than P2P channels.
2: Less Trouble With Paperworks:
If you apply for a crypto-to-cash loan, you will need to channel a bank account, and then only you will need to fill a few forms. Rather than that, you don’t have to undergo any paperwork if you opt for a crypto-backed loan. So, people who don’t have the proper KYC documents can easily apply for loan requests with crypto trading.
3: Diversified Loan Opportunities:
P2P loan opportunities are restricted across specific geographic locations, but crypto trading can open new gateways to overseas trading. Thus, it brings an ocean of opportunities to the borrowers and lenders. While the lenders get to diversify their client portfolio worldwide, the borrowers get a broader channel of lenders, so that’s a win-win situation for both.
Disadvantages Of Crypto Trading
1: Safety Concerns:
Some firms are connecting the lenders and borrowers on crypto trading platforms, and there is another channel where the lenders and borrowers can directly interact. But, if you access the lender or borrower through a firm and don’t take proper hacking measures, it can lead to security breaches.
Many investors have undergone considerable losses due to the lack of security measures because crypto platforms are prone to online hacks more than stock markets.
2: Market Volatility:
Crypto trading indeed offers you a higher return on your investment, but it also comes with its risks. The market is always fluctuating there, and that’s why it is more susceptible to market crashes. In addition, you have to calculate the profit/loss value on the full valuation of the trade. So, the trading margin amalgamated with volatile markets may cause you a significant financial loss.
3: Unpredictable Pricing:
You cannot determine the price of cryptocurrencies because their supply and demand depend greatly on the market variations. When you decide to buy/sell those crypto coins, you may not have a great supply of those coins, which will lead to a higher price. Even when you use crypto coins to measuring the CFD position or spread betting, the charges become higher.
Some people consider crypto trading as the currency of the future, and we agree that it has got a lot of opportunities. But, the world of crypto trading is quite complex, and with high rewards, there are also high risks associated with this phenomenon.
Even the newer crypto coins contain more risks than the older ones like Bitcoin and Ethereum. So, if you are interested in exploring crypto trading, start with these old digital currencies.