The Best Person-to-Person Bitcoin Loan Networks (Bitcoin P2P Loans)
The world has gone digital and there are many things we do now which avoids a long process before it gets accomplished.
With few “taps” and “clicks” on your device, you can make a transaction that would ordinarily take days or weeks.
One of these transactions is getting a loan from the bank which could take months but with improved technology, within 2 hours, you can get your loan easily.
This isn’t limited to money alone, Bitcoins also makes a difference.
There are many person-to-person bitcoin loan networks available in the crypto world, however, some are only considered best due to certain factors.
One of the best cryptocurrency exchange system so far is by hand-to-hand because it easily involves negotiation.
In a crypto exchange platform, there is a level of trust established between the lender and the borrower.
What are Bitcoin Loan Networks?
There has been a great revolution in the lending market for bitcoin after being stagnant for many years. With this revolution, many individuals access a personal banking platform for lending and borrowing bitcoins.
In simple terms, you can now lend and borrow bitcoins from individuals without having anything to do with the bank or any regard for government regulations.
Crowdsourcing your loan is now made possible with Bitcoin economy because lenders can now go for one with an affordable interest rate.
Also, with this system of crowdsourcing, interest rates with profits are granted to lenders and inexpensive loans are also granted to borrowers at the same time.
All of these happens with the help of a person-to-person/peer-to-peer lending system which leverages Bitcoin technology; making it easy and cheap.
Bitcoin loan networks are available in different ways, and this includes the bank or person-to-person option.
In this article, we are interested in the person-to-person loan because of its potentials and benefits rather than the bank loan due to certain factors such as time and proximity.
The Bitcoin loan network provides a lot of benefits attached for both lenders and borrowers. The rise of free bitcoin telegram signals is a jumpstart for these services.
What you should know about P2P Lending Marketplace?
We’ve been told many times that the future of currency lies with Blockchain technology because it is faster, cheaper and easier.
With P2P lending, many sets or groups such as the under-banked and overbanked, as well as people deficient of a good credit history have access to take out crypto-loans from the lending marketplace.
This lending marketplace ensures that all types of borrowers get a favorable interest rate for borrowing.
With P2P lending marketplace, an alternative has been created for traditional banking which is slow and extensive when taking out loans.
Also, savvy investors have the benefit of a profitable investment avenue which has been created in the system. There is another difference in loan approval between traditional banks and P2P groups;
P2P groups enjoy a better loan approval rate, lesser bureaucracy as well as a lower interest rate. On the other hand, Traditional banking provides a significantly higher return when compared with investment products and lower market volatility.
P2P lending marketplace serves as a shield for everyone who is interested in making transactions or lending.
Currently, P2P lending is about to get upgraded and an Initial Coin Offering (ICO) is put in place toraise funds.
These funds are aimed at expanding the P2P’s infrastructure and there are plans to make sure crypto services and products are set in motion to change our business world.
In addition, Person-to-Person lending marketplaces are simply online platforms that facilitate borrowing for individuals and organizations with lenders.
They are so different from banks because they don’t hold or loan funds but serve as an intermediary between lenders and borrowers.
One way providers of P2P generate revenue is through fees and commissions which will be paid by all individuals (parties) involved with the lending and borrowing process.
In this approach, no overhead costs are required, there is a reduced bureaucracy and the decision system is very short i.e. can be made in no time and loans can be approved instantly.
For each P2P provider, different returns are being offered to lenders on the basis of the type of loan granted as well as the borrower’s profile. About 8 % to 13 % is earned by fast invest lenders in the marketplace.
Different Lending Platforms
1. Bitbond: This is a cryptocurrency-based P2P lending platform that operates out of Germany. The firm invests in small medium enterprises (SMEs) and entrepreneurs.
They ensure that borrowing and lending are made available to people across borders.
2. BTCPOP: They are regarded as the world’s first Person-to-Person bank which will be based in the United Kingdom.
One thing they do is to instantly sanction loans for entrepreneurs and small-scale businesses all around the world using the Bitcoin payment network. Customer’s coins are stored in an offline storage mechanism called Cold Wallets.
Account holders are offered 5 % on this platform for just saving bitcoins in their accounts. In summary, they simultaneously merge traditional bank with modern banking (the use of P2P technology).
3. KIVA: They are unique and distinct as a Bitcoin lending platform. They are based in the United States and act as a Non-Governmental Organization, hence, interest rates are not charged on this platform.
However, some small/micro institutes are charged at the very small interest rate. They are supported by grants and loans which is necessary for donations like a generous crowdfunding platform.
Some people from countries like Togo, Rwanda, Egypt, Bolivia and places where people are unbanked enjoy support from this platform. In short, they have changed a lot of lives and expanded in the US and also across the world.
How Does Cryptocurrency Loan Work?
By leveraging on blockchain technology, person-to-person lenders make sure a faster, cheaper and a reliable service is provided.
They cater for transparent service to lenders and borrowers in the system. These transactions are instant, certain, and there is no transaction fees required. There are three benefits of using blockchain to aid P2P lending, these are:
- Lower Fees: P2P providers have to cooperate with banks when lending in fiat currencies. These banks control all transactions and direct the cost to borrowers and lenders in form of fees. Everyone knows cryptocurrencies do not depend on banks for functioning, that is why they significantly run at a lower cost, making person-to-person lending very cost-effective and easy for people.
- Geographical diversification: Unlike banks, cryptocurrencies allow a cross-border transaction to take place, offering benefits to parties involved (borrowers and lenders). This platform grants access to various countries and continents around the globe and offers benefit for lenders while borrowers only get their benefit from a group of lenders, independent of their location.
- No Need for Bank Accounts: Everyone knows how slow and time-consuming it is to open a bank account, even 40 % of the world’s population is currently unbanked. With the aid of crypto-loans, people appreciate the internet and reduce the influx of people in banks as well as ensure markets stay relevant. People can now borrow or lend without having a bank account, just with cryptocurrencies.
Example and Statistics:
For example, Mrs. Williams is a widow whose husband died a few years ago, just lost her job as a clerk in an institute because the institute had a business downturn and needed to lay off workers to balance the system.
She is now unable to pay the mortgage and because of her age and status of credit loan (a bad credit score), traditional banks are rejecting her application for a loan to start up a business.
If she doesn’t get this loan, there is a possibility she loses all her property and be left with nothing.
However, in her digital wallet, she has four bitcoins. If Mrs. Williams sells the bitcoins, she could settle the mortgage payment but her plan is to hold it as a long-term investment for the future.
Fast Invest comes through here. Currently, the ratio of BTC to euros is 1 BTC = £10, 038. Mrs. Williams has four bitcoins which convert to £40, 142. The maximum amount she could borrow is 80 % of the total bitcoin value, which is £32,114.
For lenders who will loan Mrs. Williams, Fast Invest will ensure that 20 % interest rate is offered and in return, Mrs. Williams will get a loan with 22% interest rate.
With this opportunity, she is able to utilize her bitcoins without selling them off. Obviously, she would be able to pay off her loans when bitcoins value rises higher than when she deposited them.
How can you get a Bitcoin Loan?
To get a bitcoin loan on P2P lending platforms, there are some steps you should follow carefully to ensure you get a suitable loan successfully.
The first step is to successfully register on Bitcoin lending platform and go through their verification process as below;
- ID verification.
- Verification of Income.
- Verification of PayPal.
- Verification of Social Media Accounts (Facebook, Twitter, etc.)
- Personal References
- Seller Account Verification such as Amazon, eBay, etc.
Select a loan that best suits you with regard to the lending rates which has been suggested by the platform or directly agreed by the investor.
Get approved for loan in few hours and receive your funds wherever you are on the globe.
What are the Risks involved with Crypto-Proved Lending?
Although Crypto-proved lending is useful, effective, easy and life-saving, that doesn’t mean there aren’t inherent risks that come with it.
There are ways to curb these risks but first, they need to be addressed because many crypto assets are put up as collateral for loans but the dangers aren’t being considered.
There are risks involved when you consider moving your coins and tokens from any of the best cryptocurrency exchange to a lending platform.
The risks involved are:
- Platform Security: One of the dangers of bitcoin exchange platforms is security. There have been cases of security breaches in the past because websites dealing with cryptocurrencies are susceptible to hacking. Therefore, it is important to pay critical attention to the provider’s security and the policies that follow when there is a case of breach in security.
- Market Volatility: There could be fluctuations in the market which could be a problem for you. This happens when you try to convert fiat to bitcoins or other cryptocurrencies with the aim of paying back from fiat currency to bitcoins when you are done. Lenders or investors on this platform are often exposed to the risk of depreciation in the value of bitcoin or cryptocurrency when refunded. Lenders face the issue of low bitcoin exchanges volume.
What are the 5 Best P2P Crypto Providers available?
1. Fast Invest: With utmost concern for digital banking, they aim at expanding their platform so they can start issuing blockchain-backed loans as soon as possible. On the platform, loans could be taken out by borrowers using their crypto asset as a deposit, which will be returned on settling of loans.
2. SALT: On this platform for blockchain-backed loans, credit checks are not required as long as you have a crypto asset to use as collateral for the borrowing of loans. This crypto asset will be returned when the loan is repaid.
3. BITBOND: This platform approves for businesses by setting leverage between bitcoin and a payment network which connects borrowers who are qualified with individual or institutional lenders.
4. BTCPOP: This platform requires only reputation, not your credit score i.e. it doesn’t need smart contracts. Members can get money from other members of the platform or even make money when they lend to members on the platform. In short, members are transformed to investors.
5. KIVA: This US-NGO platform is very generous compared to other types. They are interested in crowdfunding rather than being a loan provider. Also, they don’t charge any interest rate from borrowers and use grants and donations as supports e.g. helping to start or grow a business, realize a potential and set up ideas.
Update yourself with the latest topic – Why Telegram Channels Are Best for Crypto Trading Signals
The detailed information above indicates that the future of finance and technology lies in bitcoins as well as cryptocurrencies, at large. Our lives have become better with the introduction of this scheme and the mechanism involved.
Lending and borrowing now have become easy and in no time, major problems around the world in access to financing will get reduced to a minimal level.
In conclusion, it is best to start investing and understanding how cryptocurrencies work now so that you won’t be caught unawares when you need it the most.
Feature Image: shutterstock.com
In-Post Image: bitcoinp2ploans.com, coinsutra.com, dollarsandsense.sg, nandibear.com
DisclaimerThe writer’s views are expressed as a personal opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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