Crypto Backed Loans: How to Get a Crypto Loan with Bankera and How Does it Work?

The advent of blockchain and cryptocurrencies has been a major game-changer for the financial industry as a whole. One of the most exhilarating phenomenons that now represents the immense potential of blockchain technology is the emergence of the crypto-backed loans industry. For those out of the loop, crypto-backed loans allow holders to leverage their digital assets to borrow both fiat and crypto currencies.

Sounds like a relatively simple idea; however, as of now, the crypto-backed loans industry is worth almost $5 billion. The market’s rapid growth may be an indication that it might potentially become an integral part of a lending industry as a whole, and maybe someday could even overtake the well-established solutions.

Crypto-Backed Loans – How Does it Work?

The whole crypto-backed loan idea is not too complicated. Loans are powered by smart contracts. They are listed on the blockchain network as soon as the details of the agreement are processed. Simply put, crypto-backed loans are designed to allow someone who owns crypto to collateralize it and receive a credit in return. It is a great way to put your digital assets to great use.

In most instances, companies offering crypto loans provide their users with a variety of options when it comes to cryptocurrencies. For example, Bankera Loans, a new and solid competitor in the market, supports popular tokens such as Bitcoin (BTC), Ether (ETH), Dash (DASH), NEM (XEM), as well as Tether (USDT).

Bankera also has a token of their own – Banker (BNK) that is based on the ERC-223 standard meaning that it is backwards compatible with the ERC-20 standard. All of this is important since the loan provider offers a great deal – lowering the interest rates – if you choose to repay interest with the BNK token.

What to Know Before Taking a Crypto Loan

As the number of services providing crypto-backed loans grows, making your mind up with which provider to go could be quite a difficult task. So not surprisingly, there is a whole bunch of things you should consider before taking a crypto-backed loan.

As a rule of thumb, before taking out a loan, you should look into the loan-to-value ratio as it determines how much or how little collateral you will have to put forth to secure the loan. Also, make sure to learn as much as you can about the repayment schedule and all the different ways you can repay the credit. Finally, please familiarize yourself with interest rates and find out what is the minimum starting limit as it is often a deciding criterion when it comes to getting a loan.

Nowadays, most of the crypto loans providers offer a minimum starting package of $500. This, of course, is a relatively steep price and might not be the first choice for most users. One of the providers looking to change this unwritten standard is Bankera Loans. The company is trying to break through into a competitive market by offering a starting minimum package for only 25 EUR; the upper limit goes as steep as 1M EUR. The low entry limit allows the loan provider to cater the needs of a larger public.

Another neat thing about Bankera is the variety of loan packages that they offer. As a point of reference here are the loan packages offered by Bankera Loans:

• Lowest rates: 25% LTV. Rates from 6.95%
• Most popular: 50% LTV. Rates from 9.95%;
• Max LTV: 75% LTV. Rates from 12.95%.

In addition to great package deals, Bankera Loans allows for a flexible repayment schedule. As a standard practice, the loans are issued for a year. However, the company allows to extend the period and schedule a new repayment deadline if that is needed.

Final Thoughts

With no extensive credit checks, a variety of loan packet choices, and flexible repayment scheduling options, crypto-backed loans will change traditional lending solutions shortly. And so quite naturally the market will get even more competitive, which will only complicate things for the end-user.

At any rate, Bankera Loans is one of the best all-around choices due to its versatility in loan packets, great LTV and interest rates. In addition to all of that, the company has a competent and responsive customer support center which is available 24/7. Frequently overlooked, excellent customer support services can be of immense value, especially for a novice user.