Traditional bank loan versus Bitcoin backed loan
We try to do everything we can to get a good loan. We pay bills on time, limit the number of credit cards we take out, and even pay for credit-monitoring services just to be sure we’re safe.
Still, banks limit what you can spend the loan money on. Banks don’t want you taking out a mortgage for an apartment and spending it on a new car. They usually keep money in an account, and every single time you have to ask for permission before making any purchases. In the end, the bank can reclaim any of your assets if you are not able to pay back the loan.
Whoever took a decision to take a loan from the bank, dreams about a simple process when there is no need to meet anyone and sign anything. Bank loans require a complete financial analysis and usually take a lot of time, which may not be convenient if you need the money fast.
Traditional banks want to make as much money off you as they can. A bank is a business, and no matter what your credit score is, unfortunately, it does not give you any additional privileges. Instead, banks will hit you with the highest interest rate. Exactly the bank determines how much loan you will receive.
When traditional banks just waste a lot of your time and energy, not giving you any guarantee, but a chance that you can be rejected for the loan, bitcoin-backed loans are simple to get and sometimes can be maintained in less than a few hours!
Why take a bitcoin-backed loan?
Traditional banks have lots of rules about what to purchase with your credit money. The plan with Bitcoin loans is totally different, where the lender already has your Bitcoin, so you are free to use the money in whatever way you choose. And in the case you fail to pay back the loan, you are the only person to lose.
Bitcoin collateralized loan institutions do not need your credit score. The risk is mostly removed as you are investing more value in terms of Bitcoin than the value you are borrowing in fiat currency. If you fail to pay back the loan, the loaner will just sell your Bitcoin to compensate for their money.
In simpler words, your ability to pay back the loan is less meaningful than it is in a traditional bank loan.
The bitcoin-backed loan is a very easy and truthful process compared to the traditional loan. In order for the loan to be approved, there are only two questions needed to be answered.
Did the borrower pass KYC?
Does the borrower have enough Bitcoin to invest as collateral?
Most of the bitcoin-backed loan institutions require only 2 fast steps to get the credit - just to complete the online application and sign up the online contract.
There are a variety of lending platforms for you to find the most suitable for you to get a loan. Having an extended choice definitely allows you to find a convenient one for you personally. Today financial services for crypto investors are growing rapidly. There are many ways to find the best loan platforms backed by bitcoin, and the options are only increasing.
A bitcoin lending institution based on blockchain technology will promise you transparency that traditional banks could not. Moreover, as there is no third party to control the system, lenders and borrowers can interact directly reducing any misunderstandings.