The established cryptocurrency company CoinLoan has taken measures into their own hands and cut their interest rates in half for some assets even more than that. By reevaluating and iterating the calculation process for interest rates, CoinLoan attains interest rates as low as 4.5%. Instead of charging a fixed rate of 10% on cryptocurrency loans, CoinLoan switched to depending on the loan-to-value ratio. This creates the opportunity to set a very low interest rate based on the loan-to-value ratio you choose.
The term loan-to-value ratio is a financial instrument that’s common with traditional institutions and lending firms. It’s an assessment of the risk the borrower is taking when taking out a loan. Usually, this is done when a household applies for a mortgage or any large purchase. The ground rule: the higher the LTV ratio, the higher the risk of the loan. Thus the interest rate is higher than otherwise. CoinLoan is one of the first parties in the cryptocurrency industry to introduce this financial instrument. The reason for this is to embrace uncertain times for borrowers and allow them to create some protective measures for themselves.
Within the CoinLoan platform, the Instant Loan tab changed to allow borrowers to pick their preferred LTV ratio. Whereas there was a fixed fee for any loan, there’s now a ton more options. Users choose the amount to borrow, see what their collateral amount is, and after that pick either 20%, 35%, 50%, or 70% LTV ratio. On your right, you’ll see a summary with all details of your loan, and thus, the interest rate you’ll eventually have to pay. The interest rates are different per asset; for cryptocurrencies such as Bitcoin, Ethereum, and Litecoin, the interest rates for a 20% LTV is just 4.5%.
When taking a one year loan with a 20% LTV, you’re paying only 4.95% interest rate, that’s one of the lowest in the industry. Other companies can only offer these appealing interest rates for small loans within a specific limit, but with CoinLoan, there’s no limit to the amount you want to borrow. This drastic change in practices is entirely in line with CoinLoan’s philosophy to change lives by making lending as easy as possible. You can always outperform the industry standard, you only need to find the right company.
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