The legacy lending industry has many problems. To start with, there’s a massive unbanked population that doesn’t have access to loans. Those who get loans face lengthy approval times and highly volatile interest rates. In most cases, the parties have to bear a number of fees as well.
To fix these traditional lending issues, many promising blockchain lending platforms are coming up and offering borrowers a range of loans — right from small business and instant loans to P2P secured or unsecured loans. These crypto lending companies are making loans cheaper, faster, and safer for all the stakeholders. Let’s look at the top crypto lending platforms and see how they’re disrupting the traditional lending ecosystem.
BlockLoan aims to contribute to a “world with easy access to credit, anywhere & anytime.”
BlockLoan comes from the makers of Lodex, a leading Australian loans marketplace serving 40,000+ users and offering a rich infrastructure that offers services like credit scoring, asset valuation reports, and social scoring among others. BlockLoan that works with both crypto and fiat loans is built upon Lodex and will use it for its end-to-end loan management.
With BlockLoan, borrowers can apply for:
Crypto Margin Loans Backed by Equity Portfolios: Crypto loans based on the value of the borrower’s publicly listed equity shares and managed funds.
Crypto Margin Loans Backed by Crypto: Fiat loans based on the value of the borrower’s crypto holdings.
Fiat Personal Loans Backed by Crypto: Loans at competitive rates from a global pool of lenders based on the borrower’s crypto portfolio.
In addition to its unique margin loans and fiat lending, BlockLoan also offers its users a crypto debit card and digital wallet. Using these, the borrowers can access their funds in realtime from anywhere in the world and also easily work out the liquidity for fiat conversions using BlockLoan’s network of partner exchanges and digital wallets.
You can check out our detailed take on BlockLoan here.
Debitum Network helps small businesses secure loans via blockchain. It decentralizes the small business loans industry by matching SMEs that need loans with its network of risk analysts, insurers, investors, collectors and more.
With its huge network of service providers and investors — and distributing the power in the hands of all its participants — Debitum frees small businesses from being tied to a central bank or lending institution and spending days and months following the traditional loan processes. All of this while protecting the small businesses against factors like low-risk tolerance, stringent loan terms, and painfully slow disbursal processes.
Debitum Network offers collateralized loans. Unlike most of the other crypto loan platforms in the making, Debitum is a hybrid P2P lending platform that accepts physical assets as collateral. To be used as collateral, physical assets just need to be registered via Debitum’s blockchain network. Debitum has planned to support multiple types of assets such as Factoring, Business loan, Guarantee, Property, Stock, etc.
Libra Credit wants to bring open access to credit to all the users at all times. Its decentralized lending ecosystem offers users secured crypto-to-fiat and crypto-to-crypto loans significantly faster than traditional lending platforms.
With Libra Credit, users can invest their crypto assets and take loans against them. This way, users get to keep their crypto assets while getting the cash to spend as well.
Lenders, too, benefit on Libra Credit as all the data is available on Libra Credit’s Ethereum blockchain. Also, to protect against default scenarios, Libra Credit evaluates the borrower’s creditworthiness as well in addition to checking the creditworthiness of the pledged collateral. Because Libra Credit has its in-house exchange platforms, its users get the best exchange rates.
Libra Credit offers collateralized loans. As collateral, Libra Credit accepts multiple cryptocurrencies such as BTC and ETH.
With its instant loans, Nexo solves the problem of liquidating digital assets that comes in the way when people want some immediate cash. Nexo lets users borrow money by leveraging their cryptocurrencies.
To get loans, users simply need to put their crypto assets in their Nexo wallet and get instant loans in fiat.
Unlike traditional banks, Nexo doesn’t charge any fees like the Application Fee, Administration Fee, Commitment Fee, Legal Fees, etc. for the transaction. Nexo doesn’t even charge an exchange fee.
In addition to instant, transparent loans, Nexo also offers its users a free virtual credit card (that comes without any annual or monthly fees or hidden fees). This card’s limit is decided based on the asset values a user holds in the Nexo wallet.
Nexo offers collateralized loans. As collateral, Nexo accepts crypto assets like Bitcoin, Ethereum, etc.
SALT Lending solves the “illiquidity” problem of crypto assets. It lets users get blockchain-backed loans and helps them retain their crypto portfolios while getting the cash they need. In addition to an easy application process and fast approval, SALT Lending also offers competitive interest rates and tax friendliness.
This crypto lending platform that offers “traditional lending secured by non-traditional collateral” has already processed $50+ million worth of loan requests.
SALT Lending offers collateralized loans. As collateral, SALT Lending accepts all types of blockchain assetslike BTC and ETH. It might add support for digitized traditional assets like digital gold, a stock or a title, etc. (with the ownership recorded on blockchain) to act as collateral.
One of the most transparent crypto lending platforms, Unchained Capital offers users crypto-backed local and international loans for a period of 3 to 60 months. By securing loans against their cryptocurrencies, users can maintain their crypto asset portfolios and still get the money they need within a day.
Unchained Capital offers a wide range of personal and business loans. Crypto investors can also borrow cash from Unchained Capital to invest in real estate and benefit from lower tax liability.
Unchained Capital offers collateralized loans. As collateral, Unchained Capital accepts Bitcoin and Ethereum. It’s considering accepting other cryptocurrencies as well.
Wrapping it up…
These crypto lending platforms help both the lenders and borrowers unlock the value of their digital crypto assets without having to sell them.
However, the volatility in the value of cryptocurrencies make the logistics of such lending platforms tricky. If you’re planning to launch a loans (or any financial) blockchain solution, consider working with an advisory team that can help you work out the different possibilities and make the solution a win-win for all the stakeholders. Find out how Kapitalized can help.
Also, check out our detailed post on blockchain-powered decentralized P2P lending and the different P2P crypto lending companies.
Also published on Medium.