Although cryptocurrencies have not been around for all that long, they are fast gaining in popularity, leading to widespread adoption by all kinds of investors, both as individuals and by institutions. Crypto offers an alternative to fiat currencies when it comes to settling transactions. In addition, they act as an investment vehicle because investors can buy them and sell them later at a higher price to make a profit.
However, digital currencies pose a risk due to their highly volatile nature which means they can quickly lose value. You could lose your wealth if their prices fall significantly. Having said that, crypto investors who have chosen not to worry about price volatility (since they are in it for the long term) can use their cryptocurrencies to secure Ethereum loans and others.
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Understanding Ethereum
Before you seek an Ethereum loan, it would be best to know what Ethereum actually is. Ethereum is a decentralized, open-source software platform that employs blockchain technology. The Ethereum network has its native coin, the Ether (ETH). While ETH comes second to Bitcoin in terms of market capitalization, it ranks higher when it comes to being the most active blockchain network.
What is an Ethereum loan, and how does it work?
Similar to traditional loans that require borrowers to pledge assets such as automobiles, homes, or other assets, crypto loans use cryptocurrencies as collateral. Ethereum loans use ETH as the assets to secure the credit products.
Although holders of digital coins usually want to retain their coins, like Ether, to take advantage of price increases in the future, they would still want to get funds to settle obligations or to invest in other areas. Therefore, crypto lending makes getting funds possible without selling your digital coins.
No matter the current price of Ether, crypto investors and enthusiasts believe that ETH is a coin worth HODLing. Ethereum lending offers an excellent way to use your ETH to get your hands on funds without liquidating your investments. Fortunately, if you wish to get an ETH loan, YouHodler is your go-to platform to quickly and conveniently do so.
It is pretty simple if you are looking to use Ethereum lending to raise funds with YouHodler. All you need to do is open and validate your account by following some easy steps. After that, you deposit your Ether coins to the wallet, and you can use the crypto as collateral to borrow Ethereum loans.
Reasons to borrow Ethereum loan on YouHodler
As there are many platforms where you can get ETH loans, it would be better to use YouHodler to obtain your ether-backed loans. Below are some of the reasons to consider this platform for your Ethereum loans:
- The platform has friendly loan-to-value (LTV) ratios, for example, 90% LTV for 30-day loans. The LTV is the ratio of the assets to loans that borrowers have to deposit to get loans. If the LTV is high, the borrower has to surrender a lower amount of cryptocurrencies but has to be ready to top up the security in case the price of the coins drops.
- YouHodler offers borrowers more flexibility in terms of repayment options
- The platform has excellent security features to ensure users’ funds and data are safe and kept from any online scammers.
- YouHodler has several withdrawal options, for example, via credit cards, and wire options including SWIFT and SEPA.
- Compared to various crypto-lending platforms, YouHodler has the best customer service team for offering support. They also have one of the most user-friendly websites with lots of information about their products, giving users an easy time.
Benefits of borrowing an Ethereum loan
Are you wondering why you should consider getting Ethereum loans instead of conventional loans? Here are some of the advantages of ETH loans over traditional loans:
·No credit score checks
With traditional loans, lenders usually check your credit score and history once you apply for a loan. The good news is that platforms and exchanges that extend Ethereum loans do not do the checks but only need ETH or other cryptos that you can convert to Ether.
· Faster processing
Ethereum loans, and generally all crypto loans, have a faster turn-around time. When you meet the requirements, the funds are processed quicker, and you can borrow online using apps like the crypto wallet app for YouHodler.
· Lower interest rates
While they may not be as cheap as auto-loans or mortgages, Ethereum loans and other crypto loans may be less costly than personal loans, and even credit cards
·Crypto saving options
Most crypto lending platforms like YouHodler also offer the users the chance to save their digital assets and earn interest on them.
Conclusion
As you can see, Ethereum loans are an excellent option to get your hands on funds without selling your assets. However, you need to know that any significant fall in the price of ETH can cause a margin call and the lender may require you to top up your Ether, or you could lose your pledged ETH. Also, you may not use or trade with your ETH if you pledge them as collateral.