A crypto-backed loan is a new type of service that gained popularity during the recent slow-down in cryptocurrency activities, aptly dubbed the “Crypto Winter.” Back in December 2018, crypto bulls frenzily invested in Bitcoin [BTC], Ethereum [ETH], and XRP, among other coins. Once the market plummeted, some people chose to sell their cryptocurrencies for low prices and other people chose to HODL. For the HODLers, the past few months have been a seemingly long and continuous journey.
Because small businesses and individuals currently need cash to pay for rent and cover other necessary day-to-day bills, they often borrow cash from crypto-backed loan providers. To do this, they sign up to borrow cash loans, using their cryptocurrencies as loan collateral. When their financial situations stabilize, they repay their loans to the crypto-backed loan service providers, in return for their digital coins back. In this article, we have outlined the top 3 crypto-backed loan leaders in the market today.
Crypto-Backed Loan Company: Nexo
Nexo is one of the first companies in this field. It issues loans from $1,000 to $2,000,000 and serves clients from all over the world. The platform has over $1 billion in crypto-backed loan requests.
Pros:
- The company operates all over the world.
Cons:
- Nexo accepts a limited number of cryptocurrencies as collateral. However, the loan-to-value ratios are generally small and the loan process takes some time.
Crypto-Backed Loan Company: SALT Lending
SALT Lending is yet another crypto-backed loan platform. The company has over 64,000 platform members at this moment, and it already has $50 million in loans serviced.
Pros:
- Because SALT uses a peer-to-peer approach, it allows investors to become lenders and to capitalize off of others.
Cons:
- For people seeking to obtain loans, SALT accepts a relatively low number of cryptocurrencies as collateral. The loan-to-value ratio, up to 60%, seems to be low as well.
Crypto-Backed Loan Company: YouHodler
At this moment, YouHodler is the youngest and most competitive player in the market. Because the company wants to stay competitive with monster lenders like SALT and Nexo, it is offering better terms to its borrowers.
Pros:
- At up to 70%, the company offers the highest loan-to-value ratio in the market. The process of obtaining a loan is extremely fast and simple. A loan can be taken instantly, and the entire process usually takes no more than a few minutes.
- Additionally, unlike its competitors, YouHodler currently accepts five of the top cryptocurrencies as loan collateral. Whether you have BTC, ETH, XRP, BCH, or LTC, you can use it as loan collateral to borrow instant cash. YouHodler’s customer support works well.
Cons:
- The company does NOT serve customers from the U.S., Korea, and China. It is important that crypto-backed loan providers continue helping out HODLers through the harsh times of the Crypto Winter.
So, before you sell off your digital crypto assets next time, first give crypto-backed loans a shot. They are definitely worth the try.
