CoinLoan
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F.A.Q.
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General

What is CoinLoan?

CoinLoan is an innovative lending platform where crypto assets are used as collaterals. Any user can act as a lender or a borrower.

What is the difference between CoinLoan and other lending platforms?
  • The lowest interest rate on the market.
  • Providing loans in fiat currency secured on a crypto asset (cryptocurrency, tokens).
  • It's possible to receive and provide micro loans.
  • Global exposure of lenders and borrowers.
  • Guaranteed repayment to the lender and full absence of risks.
  • Immediate proceeding of applications for loans.
  • Guaranteed loan reception without checking the solvency of the borrower.
  • Any individual/legal entity can act as a lender or a borrower without obtaining licenses for performing such activity.
  • The lender does not need to evaluate the financial solvency and potential risks before providing a loan.
  • Convenient ways of depositing/withdrawing funds.
  • It's possible to refinance loans.
What is the operating principle of the platform?

In our platform, any user can act as a lender or a borrower.

The lender deposits fiat funds through international/local bank transfers or bank cards and creates applications for providing loans on favorable conditions (terms, interest rates) individually. Alternatively, s/he may delegate this duty to our system which fulfills it continuously in a fully automatic mode, so the user does not have to create and continuously control applications manually. If the borrower does not repay the funds, the system will automatically liquidate (sell) the pledged crypto asset and return the funds to the lender (including the interest rate), thus warranting absence of risks and full repayment of funds.

The borrower deposits crypto asset funds then creates an application for receiving a loan in the amount that does not exceed 70% of the current market value of the collateral. This limitation has been created for preserving the crypto assets of the borrower and reducing risk related to the high volatility of the crypto asset market. After this s/he easily and quickly withdraws fiat funds, then repays and takes back his/her crypto asset in full amount.

Why CoinLoan has the lowest interest rates?

Because we guarantee lenders a full repayment of funds and risk absence; the interest rate does not include risks of default.

What is a crypto asset?

A crypto asset is a cryptocurrency (Bitcoin, Ethereum, etc.) and tokens (ERC20, WAVES, etc.).

In what countries your service is available?

We plan to perform a global market reach. The detailed list of countries will be published later.

How much will the platform fee comprise?

A borrower can pay a platform fee of 1 CLT for borrowing a $10,000 loan for 1 month. For loans covering a longer time horizon, CoinLoan will use a formula to calculate platform fee. It must be noted that the longer the loan term, the lower the monthly fee.

The lender will pay a fee equal to 10% of the income received from the accrued interest. You can find more details in the next answer.

What is SCO? When, where and how it will be held?

In our case, SCO (Secondary Coin Offering) is a limited token sale after the official launch of the platform. SCO will be held only if the funds for further platform development are needed (e.g., for entering new markets). The sale will only be performed on our platform at a price equal to $10. If the market price of the token (CLT) is above $10 it will be sold at market price.

How can you predict the $10 token market value after launching the platform?

We are not predicting the market value of CLT. After the official launch of the platform during the SCO the tokens will be sold at a price not below $10 for 1 CLT. Demand for the token is generated in the following ways.

First, the lenders will be charged 10% of their income (i.e., accrued interests). Here’s an example: Let’s assume that the lender has provided a $10,000 loan at 15% and gained $1,500 as interest. These $1,500 will be charged a 10% platform fee. This is a charge of $150 (a low fee for the full safety of funds). But the lender will be able to pay 15 CLT instead of $150 expressed as 1 CLT >= $10. Therefore, it will be more profitable for the lenders to pay the platform fee in tokens. Note: The fee will be 10 times lower for Pre-ICO participants who have bought tokens at $1.

Second, as earlier stated, borrowers pay a platform fee when borrowing loans. Unlike lenders, they cannot choose to pay in fiat.

What will happen if the market value of the token exceeds $10? Are you going to put the cap on the market value?

No, we are not. After the token price on the market (crypto-exchanges) exceeds $10, we will also correct the rate inside the platform. The token price at SCO and the lender’s fee will be based on this rate.

How will the tokens be distributed?
What will happen with the unsold tokens?

All unsold tokens will be sold at SCO in limited lots only after the official launch of the platform and at a price not below $10.

When tokens are redeemed for fees on the platform, how are they put back into circulation?

All tokens paid/redeemed as a platform fee will be burnt.

Are you sure you’ll be able to obtain the required license?

On November 21, 2017, CoinLoan was successfully granted a European license by the Register of Economic Activities (License No.FIA000071). This license allows legal operation of fiat, crypto and alternative means of payment.

Citizens of which countries can use the platform (lend and borrow loans) on a full scale when will be launched?

After launching the platform we plan to cover most countries.

In what currency can the loans be borrowed or lent?

The lender can provide loans in major fiat currencies only (USD, EUR, etc.). The borrower can also borrow loans in fiat currencies only. Cryptocurrency is used as a collateral only.

How does CoinLoan ensure full repayment of funds and mitigate the 3rd party risk for the lender?

All loans provided on the platform are secured on the borrower’s crypto-collateral (e.g., Bitcoin, Ethereum or other cryptocurrencies). During the loan term, the crypto-collateral will be stored in the safe CoinLoan vault. If the borrower does not repay the loan, the system will automatically sell/liquidate the crypto-collateral and return the funds to the lender in full.

What interest rate will the platform provide?

The platform will not provide a pre-set interest rate. It will be fully market-dependent. The lender will set the interest rate in his/her loan application, and the borrower will state the desired interest rate for getting a loan. The system will automatically bring the matching applications together.

Will there be any intermediary milestones/news before launching the project?

Yes. After the ICO ends, we continue with the licensing the company. Further, we will regularly publish reports on both legal and technical progress made. The reports will be published at least once a month at a minimum. However, we expect to produce reports on a weekly basis. Transparency is very important to CoinLoan.

For Investors

Will your tokens be listed on cryptocurrency exchanges?

After ICO we plan to list our tokens on 2-3 exchanges.

How to buy CLT tokens during Pre-Sale & ICO?

It's possible to buy CLT tokens for Bitcoin, Ethereum and also for other cryptocurrency supported by ShapeShift.io.

Why should I take part in ICO and buy tokens in advance?

After the project launch, during SCO 1 CLT will cost not lower than $10.

Why should I take part in Pre-Sale, if I can wait for ICO?

During the Pre-Sale the token price will be several times lower than at ICO so you would be able to buy a limited amount of tokens at a lowest price.

How will be CLT tokens used?

It will be possible to use CLT tokens for paying the fees for borrowing and lending.

Also, it will be possible to borrow loans secured on CLT tokens without any fee.

What is a CoinLoan Token (CLT) and what role does it play on the platform?

A CoinLoan Token (CLT) is an ERC-20 compatible token based on the Ethereum smart-contract. The main function of CLT is to pay the platform fees. This covers fees for borrowing and providing the loan. Also, there is the option to use CLT as the collateral when taking out a loan. If the borrower uses CLT as collateral there will be no platform fee, the borrower will only be charged the interest on the loan. To calculate the the maximum loan amount given a CLT collateral, CoinLoan will use the market value of the token combined with a LTV (Loan-to-value ratio) of 80%. However, when borrowers use other crypto-assets as collateral, the LTV is 70%.

For Lenders

How can I start providing loans?

To start providing loans, please sign up at CoinLoan platform, replenish the personal account of your profile with fiat currency, choose the conditions of providing loans profitable for you and create an application within a few minutes.

How is absence of risks guaranteed for the lender?

At CoinLoan platform all loans are secured by crypto assets for borrowers. In case of non-repayment of the loan, the pledged crypto asset will be automatically liquidated (sold) by the system and the funds including the interest rate will be fully repaid to the lender.

What are the maximum and minimal amounts of the loan?

Minimal loan amount - $50.

The maximum loan amount is unlimited.

What are the maximum and minimal loan terms?

Minimal loan term - 1 day.

Maximum loan term - 60 months (5 years).

In which currency can I provide a loan?

You can provide a loan in the following fiat currencies: USD, EUR, GBP, CNY, JPY, RUB, CHF, PLN, CZK.

We will be working on extending this list.

What interest rates are provided for loans?

You can state the interest rate yourself when creating a lending application. The application will be processed in case of presence or introduction of counter-offers under suitable conditions.

Can I provide several loans simultaneously?

Yes, you can provide an unlimited number of loans within your budget.

How can I deposit and withdraw funds from the system?

You can deposit and withdraw fiat funds through bank transfer (SWIFT, SEPA) and also using local payment methods.

Does the lender have to evaluate the solvency of the borrower?

No, s/he does not. We guarantee full repayment and absence of risks because all loans are secured on crypto assets of the borrowers.

For Borrowers

For what purposes may I get loans?

You may get a loan for any purpose.

How can I get a loan?

To get a loan, please sign up at CoinLoan platform and deposit the required amount of the crypto asset which will be used as a collateral to your personal account. Then create an application for receiving a loan and withdraw the received funds in any way convenient for you (to a bank card, by bank payment, etc.).

How many funds can I receive from the crypto asset market value?

It's up to you. You can receive fiat funds in the amount of 10-70% of the crypto asset market value.

What risks does the borrower bear?

The borrower does not bear any risks, providing that all loan obligations are fulfilled to the full extent, and the percentage ratio between the loan amount and the crypto asset used as a collateral is maintained.

Why should I take a loan if I can sell my crypto asset at the exchange?
  • Because of a deposit/withdrawal fee.
  • Due to the long period of funds' deposit/withdrawal transactions.
  • Due to the uncertainty of the market and potential losses related to crypto-asset market value growth.
What are the minimal and maximum amounts of the loan?

Minimal loan amount — $50. The maximum loan amount is unlimited.

What are the minimal and maximum loan terms?

Minimal loan term — 1 day. Maximum loan term — 60 months (5 years).

What requirements shall the borrower fulfill for receiving a loan?

A crypto-asset for securing the loan is the only requirement.

Which crypto-asset can I pledge as a collateral?

When the platform is launched, you will be able to secure the loan on such cryptocurrencies as Bitcoin, Ethereum, Litecoin, Dash, ZCash, Ripple. We plan to extend the list of supported crypto-assets and add popular ERC20 tokens.

In which currency can I borrow a loan?

You can borrow a loan in the following fiat currencies: USD, EUR, GBP, CNY, JPY, RUB, CHF, PLN, CZK. We will be working on extending this list.

Can I prepay the loan?

Yes, you can prepay the loan at any time without any penal sanctions.

How can I withdraw my loan and how quickly?

You can withdraw your funds immediately after receiving the loan. The time within which the funds will be credited depends on the chosen method and can be instant (in case of using our cards) or comprise up to 3 working days (in case of an international bank transfer).

How shall I be informed in case of change of the market value of the pledged asset?

If the market value of the pledged crypto asset (loan collateral) changes, you will get several notifications via Email, SMS or receive Push-notifications from our mobile app.

What shall happen if the crypto asset market value falls during loan use?
If the collateral (pledged crypto asset) market value falls, the borrower can do one of the following:
  • Increase the collateral amount by an additional crypto asset.
  • Make an advance payment on the loan.
  • Repay the loan, liquidating (selling) the part of the collateral at the current market price. The excessive part of the asset will be returned to your account.
  • Do nothing, and the system will begin to liquidate the collateral (crypto asset) automatically in increments.
What are the interest rates provided for loans?

Our platform does not provide predetermined interest rates, they are fully market-dependant and are set by lenders and borrowers.

Can I borrow several loans simultaneously?

Yes, you can borrow an unlimited number of loans within the market value of your crypto asset.

How much time does it take to borrow a loan?

Most applications are processed immediately. If the conditions of the application for borrowing a loan differ significantly from the market conditions, then the period of processing the application will depend on counter-offers from lenders.

How is safe to store my crypto assets?

Most crypto assets will be stored on cold wallets. The other operational part will be stored on highly secure multi-sig wallets with distributed key storage.

What shall happen if the crypto asset market value increases during loan use?
In case of an increase of the market value of the pledged crypto asset (collateral) the borrower may do one of the following:
  • Withdraw the excessive amount of the collateral.
  • Increase the loan amount.
  • Repay the loan, liquidating (selling) the part of the collateral at the current market price. The excessive part of the asset will be returned to your account.
What will happen if I will not be able to repay the loan or forget to do this?

If you cannot make the regular payment of the loan, the system will begin to liquidate the collateral (crypto-asset) automatically in increments. Also, you can refinance the loan at another lender by paying the accumulated interest rate.

Can I borrow cryptocurrency?

Currently, we do not provide such an option.

An example of a profitably used loan.

Let's consider the case when you have 1 BTC, for example, and you've found a prospective (to your opinion) ICO which received fiat funds for the token purchase. Let's take ICO Polybius as an example.

When Polybius was making its ICO, Bitcoin market value comprised $2000. At CoinLoan platform you receive a loan secured on 1 BTC at the current market exchange rate ($2000) and get funds in the amount of $1200 (60%). Then you buy 120 PLBT tokens for $10, and thus you have a one more crypto asset in your portfolio. Alternatively, you could have done another way: buy 200 PLBT tokens for 1 BTC. As a result, after ICO the PLBT token price fell twice ($5), and the BTC exchange rate increased twice ($4000).

In view of this situation in the first case, if you borrow a loan to invest into another ICO, currently you would have owned 1 BTC (which costs $4000 at the moment) and 120 PLBT ($5 each). As a result, you own $4000 (with the debt which comprises $1200 + 1.5% of overpayment = $1218), and you have PLBT tokens in your portfolio with current total value $600. After repaying the loan, you will own $4000 - 1218 + 600 = $3382 of net funds and locked-in profit which comprises $1382, although the PLBT exchange rate has dropped.

If you bought 200 PLBT for 1 BTC, you would have become an owner of an asset $1000 worth and locked-in loss which comprises $1000.

This pattern represents only one of the possible ways of using the CoinLoan platform.

In this case, market data as of 20/08/2017 were used.