Consumer lending has been in existence much before the crypto market came into being. In simple words, consumer lending provides financial support for a variety of reasons like; buying a house, car or family finances. Not all consumer lending schemes require a collateral for guaranteed payback.
The consumer lending market has been one of the worst affected parties in the Great Recession. The amount of available credits to continue with the consumer lending practice of the market has significantly depressed since. Though in economic terms, the Great Recession has ended, the lending market is still recovering.
When the cryptocurrency market came into being, most of the principles and practices from typical financial setups on Wall Street were retained and carried over. Put simply, the only disruptive changes the cryptocurrency market brought into the finance sector is the introduction of blockchain technology and the market’s complete dependency on the community around it.
Consumer lending is one of the many practices that were carried over to the new crypto market. It manifested in the cryptocurrency market as ICOs that are conducted. Making the entire process more democratic. These ICOs are called lending ICOs and are conducted on lending platforms.
Here is a list of seven lending and borrowing ICO platforms;
SALT is a platform that allows its users to convert their crypto assets into cash loans. It allows borrowers to take from its liquidity pool of SALT tokens, each token has a stipulated value of $25 USD.
The platform is based and works on the Ethereum blockchain. Borrowers have to adhere to pretty lenient eligibility criteria in order to be able to get loans. To be eligible to take loans from SALT, users must first buy the SALT subscription. Depending on their usage, there are multiple levels of subscription packs available.
A borrower can borrow or ‘loan’ out as much money as the user has in crypto assets to give as collateral. Unlike normal consumer lending platforms, SALT does not check the borrower’s credit score, it, rather, employs anti-money laundering and know your customer checks to make sure that the terms of the loan aren’t fraudulent and the borrower are legitimate.
SALT allows crypto asset holders to take out loans on them without having to liquidate them first and demands an interest rate of something between 14 to 15%. Another interesting feature of SALT is that it does not have a time limit within which the loan must be repaid.
Unchained Capital is quite similar to SALT. It runs and works of the Bitcoin blockchain and allows its users liquidity without having to sell their crypto assets.
There a few key differences in the way SALT and Unchained Capital work and they are; the obvious first, the fact that Unchained Capital works on the bitcoin blockchain. The second difference is that borrowing members on Unchained Capital can only take loans for 50% of the number of assets they place for collateral. The interest rates are also slightly higher than SALT. Unchained Capital takes between 11 to 16% interest. Another defining difference between the two is the fact that the borrowers have to pay interest every month.
Users can use the wallets they already use and stake collateral. After the final principal payment, the collateral payment is returned to any address of the users choosing.
Othera is a company that is based out of Sydney, NSW. The company on its own does not offer loans directly but offers technical services and solutions to loan originators and investors.
Using blockchain, the company proposes to digitise and segment all information and payments, convert them into loan token coins. The company also has an online marketplace that enables trading between loan originators and investors.
EthLend is a platform that directly connects borrowers to lenders. On meeting, the two can formulate and negotiate terms of the agreement. The platform functions on the Ethereum blockchain. EthLend allows all loans on any ether token as collateral.
EthLend essentially is a networking site for investors and lenders to meet prospective borrowers to whom they can give their money.
BitBond is a platform that allows lenders to borrow up to $25,000 USD. the platform runs and works on the Bitcoin blockchain. The lenders are connected to borrowers after the evaluation of financial assets from the borrower. Repayments are done on the platform and can be repaid anywhere between 6 weeks to 5 years.
All the loans that are issued are bitcoin-secured and repayment must be done on the platform itself. This is a platform that has a lot of traction in the community because of the no-limit investment.
BTCPOP is a bitcoin loan lending service network that connects borrowers to lenders and allows the two parties to exchange messages for individual assessment of the agreement. BTCPOP also checks financial status, identification, etc before connecting a prospective borrower to a lender. BTCPOP works on the bitcoin blockchain.
Credible Friends works a little differently from the previously listed lending platforms. It is a peer-to-peer credit card replacement app that allows borrowers to borrow bitcoin from people that they trust and are on their list.
It works just as a credit card would work. And payments are also done the same way credit card bills are paid. The platform allows people to borrow bitcoins as a credit loan from people on their list.
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