Though economists report that the Great Recession is over, consumer lending has been slow to recover. According to data from the Federal Reserve Bank of St. Louis, demand for consumer lending in the years following the Great Recession was higher in relation to lending demand at the beginning of the recession than it was for the 2001 recession.
However, the amount of available credit has been notably depressed. For those without the excellent credit needed for traditional lending who find themselves in need of a car loan, loans for schooling, business funding, or a new mortgage, there may be few options available.
Since digital currencies are disrupting the financial world, it makes sense that lending ICOs have emerged. While peer-to-peer and non-traditional borrowing existed prior to the invention of the blockchain, altcoins provide a way to offer lending in a democratic, decentralized way.
Here is a look at some of the top altcoin lending platforms currently available.
|SALT||Ethereum||A no-credit-check-required platform, SALT works by allowing borrowers to draw from its liquidity pool using SALT tokens as collateral. SALT tokens, which have a set value of $25 but are being traded in the post-ICO market for as little as $4, not only cover the borrower’s membership fees but also establish the borrowing limit. If the borrower placed as collateral one SALT, for example, the most he or she can borrow is $10,000. However, a collateral of 100 SALT would allow borrowing of over $1,000,000.
Interest on the loans varies between 10 and 15 percent and access to the loans is limited to funds availability. The loans themselves are not secured via Ethereum but are made available offline through member lenders that have been vetted as accredited investors. Any altcoins held as collateral are returned after the full repayment of the loan.
|Unchained Capital||Bitcoin||Similar to SALT, Unchained Capital allows investors to make loans against bitcoin collateral. Lenders are allowed to borrow 50 percent of what they set up as collateral capital, with interest rates at an all-inclusive 10 to 14 percent.
Unchained Capital offers lending terms of three months to up to two years with the option to renew. Unlike SALT, Unchained Capital’s loans are secured via bitcoin, with the company’s philosophy being that the large amount of bitcoin in circulation that are not actively being spent should be put to work.
|EthLend||Ethereum||EthLend offers a platform where borrowers and lenders can connect and negotiate borrowing terms. EthLend allows any Ethereum token to be used as collateral, with the LEND token being used to secure fee discounts for the system.
Loans are secured in ether with defaults resulting in a forfeiture of all coins held as collateral.
|Othera||Ethereum||Little is known about Othera, which proposes using blockchain technology to digitize all assets of loan management, from facilitating loan contracts to managing risk and tokenizing repayment. The platform allows lenders to convert partial and whole loans for the purpose of selling them on a digital assets marketplace.|
|BitBond||Bitcoin||With several years’ experience, BitBond offers lenders a trusted way to borrow up to $25,000. After submitting a financial assessment, borrowers are matched with lenders for bitcoin-secured loans with terms ranging from six weeks to five years. Repayment can be done through the BitBond website, where the repayment schedule will also be posted.
This platform is preferred by investors due to the high return-on-investment and the fact that there is no limit on what can be invested.
|BTCPOP||Bitcoin||With one of the largest loan volumes of the blockchain lending options, BTCPOP is a leader in the peer-to-peer loans market. Besides offering lender and borrower matching, the service has a chat system where users can discuss lending risk or whatever they choose. BTCPOP offers guarantees against the principal for certain loans, borrowers’ income and identification verification, and direct loan servicing.
BTCPOP also allows for the exchange of bitcoin-based loans between altcoins and tracks the reputations of borrowers and lenders.
|Credible Friends||Bitcoin||A smartphone app, Credible Friends function as a peer-to-peer credit card replacement by allowing users to borrow bitcoin from their list of trusted friends at an interest rate of 25 percent. Users can use this app as they would a bitcoin wallet or a physical Visa card, with repayment being similar to how one would repay a credit card.|
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