Lending has only been possible through traditional banks and other financial institutions. Nevertheless, as cryptocurrencies and blockchain technology are becoming popular among the masses, there is a new trend on the rise. This new trend enables you to hold or HODL cryptocurrency assets while using them as collateral in order to get a fiat loan. Considering the amount both banks and financial institutions charge on loans, this new service also known as crypto-backed loans is worth giving consideration. Various companies provide these services to those who want to borrow such as InLock.
Using Ethereum or Bitcoin as collateral for acquiring loans has become a normal practice among the cryptocurrency community. From time immemorial, various form of financial market tools have been in existence and used as collateral for acquiring credit facilities. Conventionally, one of the main collateral used for the collection of loans has been through stocks, which represent a good exchange value because it doesn’t depreciate.
Nevertheless, while stocks may not be the only option for acquiring collateral, there are other means of doing this. If you have gone through the traditional means of obtaining a loan, you would attest know that it is a tedious process. The worst part is the acceptable collaterals placed on loan seekers for the issuance of such loan.
Crypto assets are created to be liquid, seamless, and accepted universally as a medium of trade transaction. The acceptance of crypto backed loans eliminates issues of monetizing the collateral in case of a loan default for the lender. Furthermore, another advantage of crypto loans is the fact that the processing time is swifter when compared to the traditional means of acquiring loans.
Therefore, some quarters have asked the big question, what is the fuss about the emergence of digital currencies as a collateral mode for acquiring personal loans? However, the idea of using cryptocurrencies such as Bitcoin as a means of loan collateral came into limelight by some startup lenders. These lenders came with the idea of loaning cash to members of the cryptocurrency community in exchange for the borrower’s assets.
Today, there are few other startups offering such crypt-backed loans to customers. These startups allow the use of Bitcoin assets as the accepted means of collecting collateral. Among the leading startups, providing this service is InLock.
InLock is a cryptocurrency lending platform that offers instant loan by cryptocurrency. The platform allows its users to hold cryptocurrency while managing short-term liquidity by using existing cryptocurrencies as collateral. Furthermore, InLock provides a risk-free loan for its cryptocurrency holders. The credit transaction system is created in a way that involves both lenders and borrowers. InLock operates as an intermediary in ensuring the terms of the agreement between both parties are meant. Additionally, unlike other crypto-backed loan platforms, InLock deals with the issues of spendability for holders of cryptocurrency. Furthermore, it serves as the doorway for the ever-growing cryptocurrency market for crypto coin investors.
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