We live in an economy where everyone needs money. Some people need large amounts of it, which they don’t have. Loans are the saviors of such people, allowing them to start a business, pay for education, and buy a house. However, getting a loan, especially one that involves a huge amount, is neither easy nor simple in our post-modern economy.
Banks literally survive by issuing loans but are becoming more and more hesitant in giving huge loans, particularly to new startups. They demand collateral in exchange for the loan, something a lot of new startups really struggle with.
Fortunately, a far better solution has arrived to solve this problem. Crypto-backed loans are the future of the loan-economy and here are 6 reasons it makes sense to pursue them.
1. You don’t have to sell your Crypto
Let’s talk about the main reason why you should apply for a crypto-backed loan. Firstly, since you are still holding onto your crypto, this could turn out to be more profitable than you could possibly imagine. Secondly, most of the popular crypto-backed money lending businesses allow you to get back your assets whenever you want without any hassle.
2. Simple process
The process of getting a bank loan is long and complicated. You need tons of documents and approvals from multiple people, which is a time-taking verification process. This can become really frustrating, depending on the bank or your country, and demotivates a lot of people from even applying for loans.
Crypto-backed loans, from most major lenders, are almost completely free of any hassle and you can get one without having to go through any tedious process. You also wouldn’t have to show these lenders your credit history.
3. Instantly Issued
The process of getting a conventional loan is lengthy and complex, thereby taking a long time before you can get the money on hand.
This is not a problem with crypto-backed loans at all. You can receive the money directly in your bank account in under an hour after applying for one. You don’t even need to get a credit score.
4. No pre-payment fees
The lack of pre-payment fees makes sure that you don’t have to waste your time or resources before you apply for a crypto-backed loan.
5. Low-Interest Rates
One of the best attributes of the crypto-backed loans are the low-interest rates associated with it. Most of the major crypto-backed money lending websites charge you very low interest on these loans.
This is absolutely fantastic for people who have problems paying high-interest amounts due to their religious or cultural beliefs.
6. No income tax
One of the major issues hodlers face is the payment of an income tax. If you want to sell your crypto, a tax has to be paid on the profits earned during the time you held on to your crypto.
If you take a crypto-backed loan, you would still be in possession of your crypto-assets thereby not losing out on any potential gain you could earn during a rise in your crypto value. In other words, since you are not selling your coins, you wouldn’t have to pay an income tax.
Are Crypto-backed loans the future?
There are many companies and startups that are getting into this business mainly due to the fact that there is a huge potential for success by providing crypto-holders with the power to utilize their assets in a better and more profitable manner.
The crypto-world is constantly evolving at a breakneck pace. These loans are just a small step towards a future where cryptocurrencies become the norm.
Do you plan on taking a crypto-backed loan? Share your views in the comments section below.