Lend an ear. If you can’t do that, lend a little crypto.
Cryptocurrency is one of the fastest ways to earn money. Investing in Bitcoin and Ethereum diversifies your portfolio and lets you make exciting loans.
But loans are difficult. The terminology and protocols for making loans can be confusing. Once you learn them, you can compare profitable loans in no time.
Here is a quick guide to crypto loans.
The Terminology of Loans
There are a few basic terms you should understand before diving in.
The annual percentage rate is the annual rate charged for borrowing the loan. The rate is a function of the borrowed money, the initial charges, and the duration of the loan.
The interest rate is a rate charged for using the loan. The riskier a loan, the higher the interest rate is.
Amortized loans require lenders to pay interest and principal every month. Monthly payments are higher, but you will pay off your amortized loans faster.
Collateralized loans require lenders to give creditors some collateral upfront. The loan-to-value ratio determines the collateral you will pay.
Savings accounts are special bank accounts. When you deposit into a savings account, you give the bank permission to lend your money out to others. The bank cuts you into the loan, giving you interest for it.
Comparing Crypto Loans
Once you know the basic terms, you can begin comparing crypto loans to each other. A good rule of thumb is to select loans with a lower APR. The lower the APR, the less the lender has to pay.
If you have a lot of capital already, consider amortized loans for short-term investments. Collateralized loans are also a good option, especially if you want to build a long-lasting relationship with your creditor.
There are many kinds of crypto savings accounts. Bear in mind safety and security. Cryptocurrency is not insured, and the market is volatile, so you may lose money.
BlockFi is a wealth management system focused on crypto assets. BlockFi supports all major cryptocurrencies, with competitive APR and interest rates. BlockFi offers fast collateralized loans, and they are open to anyone with $15,000 or more in cryptocurrencies.
Nexo is a cryptocurrency project from FinTech. Nexo offers crypto-backed loan services that make obtaining fiat currencies easy. Their interest payments are simple, and they offer high security in cold storage.
The Celsius Network is a service that provides savings accounts and loans. They offer their own cryptocurrency, which has grown faster than Bitcoin in recent months. They support weekly interest rates, but you must pay them in their crypto to get higher rates.
If you are looking for high yields, BlockFi is your best bet. Their high-interest rates and strong security promote reliable returns on investment. Nexo and Celsius offer good services for regular payouts, but their payouts are small.
Get the Best Crypto Loans for You
Lend your name to good business. Cryptocurrencies are here to stay. Capitalize on the trend with crypto loans.
Understand the basic terms that determine loans. Then use those terms to distinguish between savings account providers. If you want high yields, go with BlockFi, but you can consider other services as well.
In this rapidly changing marketplace, get the best loans for you. Bitcompare offers a platform of services to help you find the best crypto loans. Tap into our tools today.
