• Latest
  • Trending
  • All
6 Truths about Crypto Lending

6 Truths about Crypto Lending

October 27, 2022
6 Crypto Coins that Gave the Highest Returns Last Year

6 Crypto Coins that Gave the Highest Returns Last Year

March 9, 2023
How to Spot Fake NFTs

How to Spot Fake NFTs

March 5, 2023
Grid Trading Bot: What it is and Its Use in Crypto

Grid Trading Bot: What it is and Its Use in Crypto

February 25, 2023
Privacy Coins 101; Definition, Safety And Legality

Privacy Coins 101; Definition, Safety And Legality

February 13, 2023
How Top Institutions are Investing in Crypto

How Top Institutions are Investing in Crypto

February 7, 2023
Top 5 Crypto Passive Income Generators

Top 5 Crypto Passive Income Generators

January 31, 2023
Crypto Mortgage; Step By Step Guide

Crypto Mortgage; Step By Step Guide

January 27, 2023
Crypto Bridges: All Possible Hacks Explained

Crypto Bridges: All Possible Hacks Explained

January 22, 2023
Decentralized Social-Media A Guide to the Web 3 Social Network

Decentralized Social-Media: A Guide to the Web3 Social Network

January 15, 2023
Top 5 Richest People in Cryptocurrency

Top 5 Richest People in Cryptocurrency

December 31, 2022
Bitcoin Credit and Debit Cards How Do They Work

Bitcoin Credit and Debit Cards: How Do They Work?

December 26, 2022
Bitcoin Unconfirmed Transaction How to Go About It

Bitcoin Unconfirmed Transaction: How to Go About It

December 21, 2022
  • Home
    • Alternative Layout 1
    • Alternative Layout 2
    • Alternative Layout 3
    • Alternative Layout 4
  • Contact
  • Publish Your Article
  • Disclaimer
Wednesday, March 22, 2023
  • Login
  • Register
Money Giants
  • Home
  • Cryptocurrency
    • All
    • Bitcoin
    • Crimes
    • Investments
    • Law & Compliance
    • Metaverse
    • Newcomers
    • NFT
    • Technology
    6 Crypto Coins that Gave the Highest Returns Last Year

    6 Crypto Coins that Gave the Highest Returns Last Year

    How to Spot Fake NFTs

    How to Spot Fake NFTs

    Grid Trading Bot: What it is and Its Use in Crypto

    Grid Trading Bot: What it is and Its Use in Crypto

    Privacy Coins 101; Definition, Safety And Legality

    Privacy Coins 101; Definition, Safety And Legality

    How Top Institutions are Investing in Crypto

    How Top Institutions are Investing in Crypto

    Top 5 Crypto Passive Income Generators

    Top 5 Crypto Passive Income Generators

    Crypto Mortgage; Step By Step Guide

    Crypto Mortgage; Step By Step Guide

    Crypto Bridges: All Possible Hacks Explained

    Crypto Bridges: All Possible Hacks Explained

    Decentralized Social-Media A Guide to the Web 3 Social Network

    Decentralized Social-Media: A Guide to the Web3 Social Network

No Result
View All Result
Money Giants
No Result
View All Result
Home Cryptocurrency

6 Truths about Crypto Lending

by Money Giants Editorial Team
October 27, 2022
in Cryptocurrency
Reading Time: 6 mins read
0
6 Truths about Crypto Lending

6 Truths about Crypto Lending

4.1k
SHARES
4.5k
VIEWS
Share on FacebookShare on Twitter

Crypto lending is the process of lending cryptocurrency to a borrower through a crypto lending or exchange platform. Typically, the lender is another crypto investor. A borrower gives digital assets and crypto holdings as collateral or security to the lender, who in turn gives cash or stable coin and charges interest on the loan. Therefore, the borrower can have the loan without necessarily selling his crypto coins, use it, then later repay within a set period agreed on. Once you have repaid the loan, you get ownership of your crypto holdings and assets. However, before you go to a crypto lending platform or crypto exchange for crypto lending, what truths should you know?

Crypto Lending is Fast

One of the reasons why crypto investors in need of cash quickly opt for crypto lending is its quick speed. A borrower can get access to the loan after a few hours of submitting the loan application form and accepting its terms and conditions.

6 Truths about Crypto Lending
6 Truths about Crypto Lending

Therefore, if you are a crypto investor and need quick cash for certain emergency needs, you may opt for requesting a crypto loan from a lender.

 In case you making a crypto payment with fewer holdings, some payment sites provide crypto payment loans either for long or short-term periods.

Crypto Lending is Flexible

The beauty of crypto lending as a solution to getting money quickly is in its flexibility. It is not rigid as it accommodates a variety of loans regardless of a borrower’s reason for requesting the loan. For instance, a crypto investor may consider securing a crypto loan when in need of cash liquidity. This is especially the case for those who have been in the crypto space for a long time now since they are mostly reluctant to liquidate their digital assets. In such a scenario, they may opt for a crypto loan instead, to meet their short-term needs, emergencies or when they come across an investment opportunity they cannot overlook.


Nonetheless, there is no fixed pay-back range for borrowers. This is because borrowers have different capabilities. While others can repay the loan after a few days, others can go up to 1 year or more before paying back the loan.

Read: Cryptojacking 101; Definition, How to Prevent, Detect or Recover

The Process has the Possibility of Hacking

There has been an increased rate of hacking with the continued growth and popularity of crypto. This is because cybercriminals know that an increase in crypto investors breeds an increase in individuals they can target with their schemes.

Therefore, as a crypto borrower, handing over your crypto assets and holdings as collateral before getting the loan, you should be concerned with your safety on the platforms and that of your digital assets as well.

Therefore, both crypto lenders and borrowers should first research the crypto lending platform to ascertain it has a good reputation in the financial markets and that it is a secure space for giving and receiving loans.


 Notably, since the whole process of lending is subject to cryptojacking, you may invest if the crypto lending platform has an insurance policy that covers any damages that may result in case of such possibilities. However, if the crypto assets are not insured, you risk losing them in case they are hacked or if the lender faces insolvency.

Crypto Lending Involves Transfer of Ownership

Both the crypto lender and borrower transfer ownership. A cryptocurrency borrower will have to offer his crypto holdings to the lender as security. In this case, the investor turns over the ownership of his digital assets to the lender until the repayment of the loan.

The disadvantage, in this case, is that there are chances of losing funds, especially if the lender becomes insolvent. On the other hand, if the borrower defaults on payment, most crypto lending platforms allow the lenders to remain with up to 80% of the collateral.

Read: Cold Crypto Storage Explained

On the other hand, the crypto lender also deposits their cash in an exchange platform, with the trust that the platform or its third parties will ensure its safety. The good thing, however, is that the lender makes money, thanks to the interest the borrower pays in the end.


The Process of Getting the Loan is Straightforward

As earlier mentioned, there is a crypto lending platform that connects the crypto borrower to the crypto lender. Therefore, the first thing a borrower has to do is to identify a platform to work with. There is a huge range of lending platforms including crypto banks, online lending sites as well crypto exchange sites. After this, he needs to follow these 3 steps;

  • Create an account; the crypto lending platform will typically require a lot of verification from the borrower. This includes verifying his identity, collaterals, and reliability by looking into the borrower’s financial history.
  • Select the loan type; crypto lending platforms typically have various loan types. this is affected by the collateral or security a borrower is willing to put up versus the interest he is willing to pay. The higher the interest rate, the lower the collateral needed.
  • Get the loan offers; Once everything is set; the borrower is done submitting the loan application form, and he gets the loan offers within a short while, usually after a few hours. He instantly gets the money after accepting the terms and conditions of the loan.

Read: Virtual Credit/Debit Cards: How Do They Work?

6 Truths about Crypto Lending
6 Truths about Crypto Lending

Crypto Lending Can Be Risky to Borrowers

Cryptocurrency is a highly volatile space. It is no wonder investors should always put in an amount they can afford to lose. Similarly, a crypto borrower should always keep in mind the risky nature of cryptocurrency.

For instance, a borrower can put up his crypto assets and holdings that are highly valued at the time of getting the loan. Unfortunately, if there are wild fluctuations within the period agreed on, the value of the collateral may decrease. This, in turn, means that the lender may request more collateral from the borrower to get back the original value. The results are either a disruption of the borrower’s financial plans or a penalty in case of a lack of crypto to meet such requests.

Are you For Crypto Lending?

Crypto lending as a process of giving money to a borrower who will in turn pay at a later date with interest, is a solution especially for investors in need of cash quickly. Nonetheless, it allows the lenders to make more money since the borrowers will pay back the loan with interest. However, before you think of lending or borrowing cryptocurrency loans, you should remember the space is volatile and risky, hence all parties involved should ensure safety measures are in place.

Related Articles you Might be Interested in:

How to Easily and Efficiently Cash to your Crypto Account

Where and How to Apply for Crypto Loans

How to Make Unlimited Crypto Payments Online

Tags: crypto lenderscrypto lendingcrypto loansCrypto payments
Share631Tweet394Share110

  • Trending
  • Comments
  • Latest
5 Best Low Budget Crypto to Invest in 2022

5 Best Low Budget Crypto to Invest in 2022

November 24, 2021
Metaverse and Cryptocurrencies – A Relative Study

Metaverse and Cryptocurrencies – A Relative Study

November 1, 2021
The Future of Cryptocurrency

The Future of Cryptocurrency

November 19, 2021
What does the price of Bitcoin depend on?

What does the price of Bitcoin depend on?

0
Who Invented Bitcoin?

Who Invented Bitcoin?

0
Cryptocurrency and the Promising Newcomers in the Field

Cryptocurrency and the Promising Newcomers in the Field

0
6 Crypto Coins that Gave the Highest Returns Last Year

6 Crypto Coins that Gave the Highest Returns Last Year

March 9, 2023
How to Spot Fake NFTs

How to Spot Fake NFTs

March 5, 2023
Grid Trading Bot: What it is and Its Use in Crypto

Grid Trading Bot: What it is and Its Use in Crypto

February 25, 2023
Money Giants

Copyright © 2015 - 2023 Money Giants.

Navigate Site

  • Home
  • Contact
  • Publish Your Article
  • Disclaimer

Follow Us

No Result
View All Result
  • Home

Copyright © 2015 - 2023 Money Giants.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In