The phrase "bitcoins backed loans" can cause people disturbances, but according to Josh Galper, CEO of Finadium Securities Research Company and Investments, crypt-secured loans do not have a different loan backed by the securities structure. "If you are an owner of IBM shares, you can offer their shares to IBM, receive a cash loan and use it as you wish. After repaying the loan plus interest, in the long run, it will continue to have the financial ownership of IBM security, "says Galper. . "If you have encryption and someone is willing to borrow it in cash, an exchange is acceptable".
Loan platforms supported by bitcoin can not be used for credit checks or income verification and do not charge early repayment rates. The terms of the loans and total annual rates are similar to unsecured personal loans, says Bloomberg, ranging from interest rates from 10 percent to over 20 percent, depending on the amount of guarantees that the beneficiary of a present loan.
On 28 December 2017, Salt Lending, based in Denver and founded by the former Business Manager of the Southern Concepts Restaurant Group, began issuing loans backed by bitcoins and ethers. Since its inception, Salt has approved loans of $ 22 million to private and encryption businesses such as mining companies.
But the instability of the encryption market can hurt people who get loans. An application developer living in Georgia, who did not ask for identification, said he used Salt to get a $ 450,000 loan with 18% interest. He put $ 783,000 in bitcoins as collateral, which is 167 per cent. Then, the bitcoin price dropped by almost 50 percent, which caused a margin call. He was obliged to put more coins as a guarantee or, otherwise, the Salt, according to the terms of the loan, might have cleared his bitcoin. But this kind of wild fluctuations, says the developer of the application, have a couple on the path. "Everything works, especially if you are using the loan to buy more cryptosystems," he says. The developer of the application says he uses arbitration to buy the Salt digital badge, also called Salt, for a little money and ends up making money after repaying the loan.Digital Assets Cashout - Bitcoins To Real Money Exchange