P2P lending is a way to match demand and supply of money through the Internet. Traditional banks as middlemen are not involved in the process, replaced by electronic lending platforms that mediate between lenders and borrowers, charging service fees.
Such a decentralized model is beneficial for both parties. It allows profitable and transparent deals with people and legal entities from all over the world on preferable conditions.
With these advantages, the P2P lending market has risen from zero since the concept originated back in 2005 with Zopa in the UK. P2P growth is remarkable, both in the number of loans and the number of investors. In 2016 alone, P2P lending generated more than $200 billion worth of investments worldwide.
Lenders choose P2P lending for many reasons. However, there are no upsides without downsides.
From the investor’s perspective, the credit application mechanism in P2P lending is risky. That’s because in P2P model lender usually has to shoulder credit risks instead of financial institutions, which are experts in dealing with this risk. That means that in case of non-repayment you may suffer financial loss.
CoinLoan created an operating model that brings together all the advantages of P2P lending and address the weaknesses connected with lender security. Check out 5 motives to invest in P2P lending with CoinLoan!
5 Reasons To Become a Lender on CoinLoan Platform
1. CoinLoan’s business model allows minimizing the risk of bad debts.
All loans listed on the platform are secured (overcollateralized) by the borrower’s cryptocollateral (e.g., Bitcoin, Ethereum or other cryptoassets). If the borrower fails to repay the loan, the system will automatically sell out (liquidate) the cryptocollateral and return the funds with accrued interests to the lender in full.
You don’t need to control the payments and the market price of the collateral — the platform does this for you.
2. CoinLoan acts as a guarantor to the lender.
All financial transactions flow through CoinLoan platform. There’s no need to transfer money directly to a borrower or to receive them back to your bank account.
All the funds are stored on the CoinLoan wallets until the deal is completed. During the loan term, the cryptocollateral will be stored in the safe CoinLoan Vault.
3. CoinLoan provides flexible lending terms and conditions.
There’s an opportunity to create lending applications on your own terms and choose the desired interest rate, term, currency, allowed cryptocollateral and maximum LTV. Or you can accept one of the existing applications from borrowers all over the world to lend instantly.
The Platform supports multiple fiat currencies (USD, EUR, GBP, RUB) and allows to lend in stablecoins (TUSD, GUSD, USDC, PAX, PAXO) for those who don’t want to deal with traditional currencies and banking system. More currencies coming soon! 😉
4. We respect your privacy.
Neither lender nor borrower has access to the personal information of the Second Party. The only data shared between parties is a platform’s unique user identifier.
5. CoinLoan is a reliable company licensed in Europe.
Fully legal status and protected infrastructure ensure the security of funds. CoinLoan company has been licensed in Europe to carry on the business of a financial institution.
CoinLoan platform automatically generates a unique Agreement for each loan.
Questions or comments? Don’t hesitate to contact us.
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