Why CoinCredit: Bank Loans vs. Selling Crypto vs. Crypto-backed Credit
Sell or Borrow?
First things first: If you believe in your crypto’s long-term growth, borrowing against it is more beneficial than selling it because you can access the value of your investment without giving up your assets and their potential to increase in price.
Crypto Credit > Regular Bank Loans. But Why?
How is crypto credit, specifically the Instant Crypto Credit Lines™, better than simply keeping your crypto and getting a regular bank loan? There are four main advantages:
- Speed & Convenience
- Accessibility & Inclusivity
Lower Interest Rates
It may sound fancy, but it’s quite simple: the Instant Crypto Credit Lines™ offer significantly lower interest rates compared to banks. We’ve dug up the numbers for you: The average interest rate on loans is roughly 10% and may be as high as 36% for those with weaker credit scores. In contrast, CoinCredit offers an APR starting from just 6.9% and never exceeds 13.9% and we don’t look at credit scores at all (more on this later.)
Banks also tend to charge all sorts of fees for their services, whereas CoinCredit adheres to a #ZeroFees policy. There are no additional costs associated with our services.
Less in Taxes
Thirdly, the Instant Crypto Credit Lines™ can save investors thousands of dollars in taxes. Unlike selling your crypto, borrowing against your wealth is not a “taxable event”. Considering that in some jurisdictions taxes can eat up more than half of your profit, this is a huge advantage.
Loan vs. Credit Line
You may have noticed that we refer to our service as a credit line, and not a loan. With loans, a client takes out a given sum and immediately begins accruing interest. The Instant Crypto Credit Lines™ allow you to withdraw as much or as little as you want, whenever you want. Additionally, you are only charged interest on the sum you withdraw, giving you greater flexibility to manage your credit as you go and pay as little or as much in interest as you decide.
If you’ve ever had to pay off a loan before, you know how it is: you are required to make monthly installments and are expected to repay the loan by a certain date in the future, leaving you to slowly accrue a set amount of interest. Traditional banks sometimes also charge early repayment fees, which effectively forces you into committing to pay more in total. The Instant Crypto Credit Lines™ scrap all monthly installments, deadlines, and early repayment fees after 30 days, so you can borrow and repay in your own time, on your own terms.
3. Speed & Convenience
You may be wondering why our service is called the Instant Crypto Credit Lines™. Naturally, it’s because you receive your money immediately. CoinCredit offers withdrawals within 24 hours of each request through our fully automated platform. To put this into perspective: just applying for a loan at a bank can take days or weeks, and receiving the cash can take longer. Our credit lines are also available in over 40+ fiat currencies across 200 jurisdictions, so you get your cash in a timely manner and in a currency that is instantly usable wherever you may be.
Being able to withdraw credit swiftly is important if you have pressing expenses. However, it can also be especially useful to traders who want to capitalize on volatile assets, the price of which may not remain stable for long.
4. Accessibility & Inclusivity: #CreditScoreNoMore
A part of our mission as a company is to make quality banking services accessible to everyone. By offering its services in 200+ jurisdictions worldwide, CoinCredit is geographically boundless. However, the financial inclusivity that comes with crypto runs deeper.
In traditional finance, wealthier individuals tend to receive more cost-efficient loans based on their higher credit scores. Meanwhile, the less privileged, whose credit scores are typically lower, pay more for simple credit. This phenomenon results in the demographics of the underbanked and – in cases where people can’t afford credit at all – the unbanked people.
To bring quality credit and banking services to the underbanked and unbanked, CoinCredit eliminated credit scores as a criterion for lending. We did this through collateralized lending: by using crypto as collateral, we bypass the risk of loan defaults. Should a borrower fail to repay their credit line, the company can compensate for the loss by selling their collateralized crypto. This leaves no need to use credit scores to determine creditworthiness and allows all CoinCredit clients to take out any amount against the necessary collateral.