The recent plunge in cryptocurrencies has driven many investors to search elsewhere for sky-high returns in the digital space.
As cryptos continue to progress towards integrating into more mainstream transactions, many supporters are now turning their attention to a crypto-based service derived from the traditional banking function.
One such service is claiming loans by using cryptos as collateral.
Yes! You read it right.
Our users can get fiat loans against their crypto assets.
Many banks haven’t yet stepped up to the plate pitching crypto loans as a growth driver, but small institutions have popped up to explore the groundbreaking crypto-financing.
Now let us briefly explain about crypto loans.
What are crypto-backed loans?
To be precise, a crypto-backed loan uses cryptocurrencies as collateral which is similar to a securities-based loan.
Here the working principle is similar to the mortgage loan. Simply you will pledge your crypto assets to claim the loan and pay it off over time. You can get this type of loan through crypto banks like N2.
If you are someone who doesn’t have the intention to trade or use your crypto assets, then you can consider claiming crypto loans because of their spectacular benefits.
Reasons to get crypto-backed loans:
The major perks of crypto-backed loans are the flexibility and the speed they offer. The borrower can be able to secure a loan in hours, and get wider opportunities for the pay-back terms, for instance0, from 6 months to 12 months.
But from an investor’s perspective, you can claim loans for any number of reasons. You may need money for short-term needs, like a medical emergency or business or what they consider to be an irresistible investment opportunity.
Some long-term investors may be reluctant to liquidate their cryptocurrency assets. That’s where crypto loans can make a lot of sense among investors.
What are the benefits you gain from crypto-backed loans:
- Low-interest rate
- Funds are based on asset value
- Choice of loan currency
- Instant disbursal process
So from the above context, it is clear that if you are in need of money and have a sizable crypto holding, then you should consider using them as collateral without selling your own assets.
When N2 provides a loan, we build a unique and dedicated collateral address for every individual customer. We do not combine deposits made by our customers, and we assure you that your crypto is not used for any other purpose than as collateral for your loan.
Since these dedicated addresses can be monitored on the blockchain, every authorized customer can verify that the crypto deposited as collateral is the crypto reverted to the borrower at the end of the loan term.
Onward and upward,
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