Why are crypto backed loans getting popular?
Crypto loans have emerged as a new financial product of this modern day digital currency. They primarily serve the purpose to help crypto investors to meet their immediate cash needs while retaining the ownership of their investment.
Most of the crypto investors have a long-term view of their investments, i.e., they have no plan to sell their investment in the near future. But a possible cash crunch, might force an investor to divest their crypto investment to meet immediate needs.
And, this is where crypto backed loans step-in: investors who don’t want to part away with their crypto investment can use their cryptocurrencies as collateral to get a cryptocurrency backed loan. This allows the investor the much-needed funds in fiat to meet their needs along with maintaining the ownership of their funds.
Crypto investors use crypto backed loan to meet their diverse financial needs, like buying a home, paying a high-cost debt, diversifying investment, paying for travel expenses and more.
Last but not least, crypto backed loans are more fast and transparent then bank loans, since they start as soon as the conditions are set by lenders and borrowers.
Owing to the rising popularity of the crypto-backed loans, many services have also came up to offer borrowers with such loans.