The crypto lending industry is booming. Every day, people who can’t secure credit from banks turn to new Bitcoin lending platforms. They secure loans and more often than not, they repay loans with interest. This allows Bitcoin lenders to earn free Bitcoin as an interest in the process.
What is Crypto Lending?
As many Nigerians know, securing a cash loan from a bank can be notoriously difficult. Banks are reluctant to make credit lines available. As a result, starting a business or buying property is only possible if you are already wealthy.
To address this problem, new crypto lending platforms allow people who own Bitcoin to lend this to people in need of credit peer-to-peer. In the process, lenders can earn up to 13% interest.
How Does Crypto Lending Work?
How crypto and Bitcoin lending works is simple. Nigerians who own Bitcoin sign up to peer-to-peer lending platforms like BitBond and CoinLoan.
After verifying their identity, cryptocurrency owners can choose projects which they feel comfortable investing in. Investors can also choose to cover all or just some of a full loan amount to reduce risk.
Is Bitcoin Lending Safe?
Bitcoin lending is predominantly safe. However, investors must choose peer-to-peer crypto lending platforms carefully. We recommend BitBond, as BitBond has been in operation since 2013. BitBond also puts several safeguards in place to protect lenders.
Partially financing several small loans hedges against risk when lending. This is thanks to the fact that lenders will still earn interest even if one or more borrowers fail to repay their loans.
How Much is it Possible to Earn with BitBond?
At BitBond it is possible to earn 13% APR on loans that are successfully repaid by borrowers. However, interest isn’t paid in Bitcoin.
When loans are fully repaid, lenders receive the cryptocurrency that they originally made available for lending. However, interest in BitBond and most other crypto lending platforms are paid in fiat cash. (Typically, with BitBond, interest is paid in British Pounds and Euros.
Is it a Good Idea to Lend on Crypto Lending Platforms?
If you HODL cryptocurrency rather than trade coins like Bitcoin, crypto lending platforms represent an easy way to earn a steady passive income.
Spreading the risk by partially financing several small loans simultaneously means that lending profits are almost always guaranteed. At the same time, though, lenders should always watch out for Bitcoin lending scams and platform bad actors.