It is now possible for people who own Bitcoin and other cryptocurrencies to secure loans against their crypto assets. This will be available on platforms such as EasyFi Network, Cashaa, and Valud.
Crypto adoption and the popularity of crypto assets are becoming more evident. In India, three firms allowed their clients to secure loans against the digital assets they hold in the form of cryptocurrencies. This will be done without involving traditional banks but using ‘crypto banks’ set up in India.
The crypto banks offering these loan services will be awarding loans equivalent to 50% to 60% of the value of the crypto assets that an investor holds. Bitcoin is the largest and most popular cryptocurrency, and aside from it, these banks will be offering loans against Ripple, Ethereum and others.
Crypto loans and interest rates
The current firms that are offering this loan service are Cashaa, EasyFi Network, and Valud. However, other small firms in India are also extending this service to their clients. A report published in the Economic Times revealed that Valud had given out loans worth $25 billion. These loans had been insured against cryptocurrencies.
The interest rates being charged by these crypto banks ranges from 12% to 15% per annum. This interest rate is very fair given that most traditional banks also offer the same interest on personal loans. A processing fee between 2% and 3% will also be charged before getting the loan.
Crypto Loans are better
One of the most positive things about crypto loans is that they do not have a period in which the loan must be repaid. Instead, you can repay them at any time you have the money. This makes them more secure and less risky compared to personal loans acquired from traditional banks.
The CEO of Valud, Darshan Bathija, commented on crypto loans stating that the firms will not use the buyer’s creditworthiness to determine eligibility for the loan. The crypto collateral will be the basis on which an individual will secure the loan. He stated that it was a great way of creating liquidity for investors who want to hold on to their crypto assets.
The CEO of Cashaa also gave his comments stating that the most significant percentage of borrowers were investors looking to monetize their crypto holdings. Crypto loans provided the perfect avenue for these investors to raise funds for their business while still holding on to their crypto assets.