Since its creation over 12 years back, cryptocurrency has disrupted the financial sector. This sector is now transforming conventional lending with cryptocurrency loans. These loans offer benefits to both lenders and borrowers.
Crypto loans, in addition to being faster and more efficient, are safer, easier to access, and provide greater flexibility than fiat equivalents. They’re also fairer, as they benefit all involved. Let’s take a look at these benefits more closely.
Fasten your seatbelts
The approval process for loans through banks can take several days, and in more complicated cases this waiting time may even extend to weeks. The simplest of transactions are completed in minutes. Crypto loans on the other hand, however, can almost always be processed within 24 hours. This is a big plus for someone in a hurry who wants to get cash.
Efficiency
The Blockchain Technology, which is the basis of all crypto loans, can approve transactions quickly and move funds instantly without needing to create physical records. This is extremely efficient compared to traditional lending because time, energy, and resources (such as paper) are not wasted.
The Security of Your Own Home
Blockchains are excellent at enhancing the security of cryptocurrency loans. Each block of a chain is cryptographically connected, so it can be protected from malicious hackers by using the latest cyber security. In fact, funds used in crypto-loans are much more secure than the ones used by other payment systems.
Accessibility
A borrower today must submit a lengthy application and provide multiple forms of ID, as well as pass a credit check. They also need to own a bank. This can be a major problem for the 1,7 billion individuals in the world who do not have a bank account. To circumvent issues of accessibility, crypto loans only require borrowers to provide proof of their identity as well as collateral. Simple!
Flexible Payments
Borrowers have little control over the details of the loan contract when they apply for one. Banks have the upper hand and can set the conditions for the loan, which are always in their favor. The borrower is in control with crypto loans. They can specify how much they want to borrow, their repayment schedule, and other important details.
Equality
Crypto loans offer a more fair system for borrowing and lending than conventional methods. Crypto loans eliminate the bank as the middleman, who takes the majority of interest earned on the loan. Instead the borrower gets the entire amount (if not more) they earn. This is because it benefits both the borrower and lender.
The benefits of crypto lending are many. As the concept becomes accepted by consumers and more common, it will become an attractive option.
