What are crypto-backed loans?
Crypto-backed loans are the same as typical cash loans. But they differ in the form of loans given to borrowers and collateral pledged to lenders. Crypto-backed loans are loans where lenders lend cryptocurrencies to borrowers in exchange for an interest fee at the time of the payment.
You may also want to know why investors borrow crypto when they can use what they have instead of using their coins as collateral. Well, not all investors are willing to sell off their cryptos when they need cash. What makes crypto-backed loans convenient is that any investor can have extra coins to dispose of without selling his original investment. When cryptos are put as collateral, lenders will not be able to sell them. It's still up to the investor whether he wants to sell his crypto or not.
Obtaining crypto-backed loans is like hitting two birds with one stone. How? Since you are able to use the lender's crypto, you get to preserve the value of your own cryptos by locking them up as collateral. If the price goes up from the time you borrow cryptos, there is a high chance that you will earn massively.
Crypto-backed-loans by SALT Lending
There are a lot of crypto lenders out there. There are some platforms that exclusively offer crypto loans, while some have a multi-purpose lending system where investors can either be a lender or a borrower. When an investor chooses to be a lender, his money is put into a pool together with other lenders' fund. The loans are taken from the pool. There are other platforms with different system, so the lending services are different per company.
One of the established crypto lenders today is SALT Lending. Just recently, this crypto-backed loan provider has been approved in about 35 states. For many, this is a massive development for legalizing cryptocurrencies. Despite the fact that there are some countries withdrawing their support for crypto, there are more countries right now that are starting to show their support for crypto, like El Salvador.
So, who is SALT Lending?
SALT Lending is a company based in Colorado and known to enable its borrowers to stake Bitcoin and other forms of cryptocurrency to qualify for loans. This unique feature is advantageous for investors because they don't have to sacrifice their future crypto profits to spend cash.
SALT aims to bring the realms of cryptocurrencies and conventional banking together via this kind of creative loan. The novel concept of SALT is an essential step towards making digital assets applicable to conventional financial transactions, such as monetary lending.
Since June 2017, SALT has provided more than $50 million in loans to over 70,000 borrowers. The credit agency expects crypto-backed loans in all 50 countries to be operating by the end of 2018.
How to get a crypto-backed loan by SALT Lending?
To get a crypto-backed loan by SALT, you have to undergo four easy steps. First, you must sign up for a SALT account here. After creating your account, you need to verify your identity next. Customizing your loan is a part of the process where you can select your borrowing preferences. You can then submit your loan application after that. The third step is depositing your collateral. You need to send your assets to a unique, multi-signature SALT collateral wallet. You will be guided to your collateral wallet once you're on the platform. The final step is getting your loan in the form of cash, TUSD, or USDC.
Ready to fund your crypto ventures or other businesses outside the crypto market? You can check out what SALT Lending has to offer before you sell your cryptos.