CoinLoan to Facilitate Loans by Accepting Crypto Assets as Collateral

CoinLoan to Facilitate Loans by Accepting Crypto Assets as Collateral

In contrast to traditional methods of banking, cryptocurrency offers better terms for borrowing against pledged assets.

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In contrast to traditional methods of banking, cryptocurrency offers better terms for borrowing against pledged assets.

A new start-up by the name CoinLoan will facilitate borrowing by offering fiat currency to its users. This start-up will avail funds in any preferred currency after analyzing and selecting the best suitable loan products for users in the market. The loans will be secured by crypto assets and they will not come with stringent solvency conditions, as is the case with traditional banks.
The system will also allow adaptability where a borrower can be a lender and vice versa. Till now, the popular way of converting crypto assets to fiat has been to trade them on an exchange. Since cryptocurrencies are volatile, however, challenges are quite prevalent with this method. Collateral will be in form of crypto assets with CoinLoan, it will be possible to secure a fiat loan by presenting crypto asset units as collateral. The lender will keep the collateral until the loan has been paid in full. To this extent, CoinLoan will return all the pledged facilities to the borrower after they have repaid the fiat loan and interests in full.
CoinLoan users will be given payment cards that can work with Samsung Pay and Apple Pay. Just like other normal plastic cards, the borrower will be able to use the credit to shop for goods, pay for commodities or withdraw money in ATMs as it will be available in fiat currency. Among the cryptocurrencies CoinLoan will support are, Litecoin, Bitcoin, Monero, Dash, Ripple, and Ethereum. Currencies supported will include: USD, GBP, EUR, JPY, CNY, CZK, PLN, RUB, and CHF. With time, supported cryptocurrencies will increase.
Normally, lenders need to confirm a borrower’s solvency, check their collateral and hold it. By doing so, interest is charged on the borrower. This will not be the case with CoinLoan as it cuts the procedures and paperwork. The system guarantees interest and loan repayment and this translates to gentler interest rates on the borrower. Funds will be wired to the borrower instantly by bank transfer or card transfer, SWIFT or SEPA. To lend, users will make fiat deposits via the same channels, plus through Sofort.
CoinLoan will facilitate loan conditions in order to transact efficiently, lenders will be availed with real market deals, charts, statistical data and authentic offers by the CoinLoan system. The system will track completed deals and store the data. Lenders will receive payments per month or when the loan matures. Such payments will include the principal amount as well as interest. Failure by the borrower to abide by terms, their pledged crypto assets will be liquidated and used to pay the lender automatically.
The platform will have the capability to track the ratio of given funds and collateral. In instances where the ratio is affected by exchange rates and falls, notifications will be sent automatically to the borrower. Such notifications will encourage the borrower to top up their account balance or to sell a portion of the pledged assets. If the borrower fails to respond, the system will automatically sell some of the collateral at prevailing rates and secure the loan. Lenders need not keep track of risks by themselves, nor do the borrowers need to have strong credit records. Lenders will be free to set the amount they are offering, its term and interests. The CoinLoan system will then use that information to match up suitable borrowers. The expected launch date of CoinLoan is 2018 and it will expand to Asia in 2019. The system will operate with a European license even though it will serve the rest of the world where additional licenses are not required. Loans will be offered starting from $50 and above.

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