CoinLoan is an asset-based P2P lending platform using alternative cryptocurrencies as the main asset-backed product. Our review on CoinLoan will be focused on the concept and use-cases involved with actually lending your cryptocurrency for loans and the future of this industry as a whole.
Background and Company Information
Table of Contents
- Background and Company Information
- Is CoinLoan Safe?
- The Riskiness Nature Of Asset Based Lending
- Technology & Regulations Behind The Company
- CoinLoan Fees & Rates Explained
- Repayment Option Explained Further
- Lending, Deposits, & Withdrawals
- Borrowing Through CoinLoan
- Loan Size & Supported Stablecoins
- The Real Review: CoinLoan – Is It Even Worth It?
CoinLoan is a no-nonsense company that provides complete transparency in the process of borrowing and lending your assets to benefit from its platform. Founded by Alex Faliushin and Max Sapelov in 2017 based in Estonia, the idea behind CoinLoan started off as an interest in the cryptocurrency.
Through seeing the potential value of HODLing Bitcoin and still being able to use your asset to benefit your life and thus using crypto as loan collateral began the start of CoinLoan.
Alex Faliushin and Max Sapelov without much history in the financial industry were able to pick up on the problems that investors were facing and with their entrepreneurial goals they built up CoinLoan to be a platform for loans secured by digital assets and have a very solid product in their hands.
Is CoinLoan Safe?
The Riskiness Nature Of Asset Based Lending
To answer this question we must first explain the concept behind asset-based lending, if you are in need of $10,000 fiat dollars and you already own an equivalent amount of Bitcoin, someone is willing to borrow you that money within the terms agreed upon as long as they know they have your Bitcoin ready in the case you are not able to pay it back.
This creates a safe environment for both the lender and borrower because there are actual assets being backed.
The risks with asset-based lending and the cryptocurrency world are that if for any reason you have your crypto held for a long period of time and the value of that crypto has dropped considerably, you find yourself paying more for an asset that is not of equal value.
So this sort of project is not for the faint of heart or someone lacking enough trust in cryptocurrency as an asset.
Technology & Regulations Behind The Company
Max Sapelov, CoinLoan’s CTO, has a background in CyberSecurity and Cryptography from Stanford, the company has been built from the ground up with Security as the top of mind.
This has been a value for the company even from the Bug Bounty programs that they are a part of to ensure there are the highest security and privacy of their website.
Their system of holding all of the companies and your assets is through offline, cold, multi-signature wallets, the most secure method of protecting cryptocurrency assets.
Transaction signing happens through an offline procedure with separate devices that involve multiple people as well as never being connected to the network.
As well as this, being based in Estonia, they follow all of EU regulation with KYC and AML procedures to provide consistent compliance with the guidelines that the EU wants every Financial institution to follow.
In fact, CoinLoan also has a $100 million coverage for digital assets insurance provided from Lloyd’s Syndicate with BitGo Wallet.
Just to walk through a few of the regulations and compliance that they follow there is:
- FinCen MSB Registration
- IRS’s FATCA FFI Registration
- EU IPO Trademark
- MTR’s Virtual Currency Provider Certificate
- MTR’s Financial Institution License
CoinLoan Fees & Rates Explained
What’s great about CoinLoan P2P Lending program is that there is no middle man or salesperson that you have to talk to to get this loan setup. It’s all directly through their platform and all the financing terms are shared upon creating the loan.
This streamlines any questions and concerns you may have because it’s directly laid out in a no-nonsense manner.
The associated fees with borrowing through CoinLoan involve: Origination Fees, Interest Rate, and Liquidation Fees.
- The Origination Fees for CoinLoan are 1% of the total loan amount regardless of the amount that you decide to borrow.
- This means that you will receive 99% of the total funds you request, these sorts of fees are a standard in the lending industry.
- You receive a 50% discount if you pay your fees through CoinLoan Tokens (CLT)
- The Interest Rate for CoinLoan stays at 10% APY of the total loan amount
- The Liquidation Fee for CoinLoan is 7% of the liquidated loan collateral
- This is only in the situation that your cryptocurrency asset price is crashing then you can request liquidation and repay your loan before the coin loses its liquidity.
Repayment Option Explained Further
The Repayment Option works off either “Interest-Only” payments or “Principal + Interest” payments
“Interest-Only” is paying only the interest of the loan until the final month it’s due, then you would pay the total principal at once. The benefit is low payments throughout the loan timeframe but will be paying the most in interest.
“Principal + Interest” payments are immediately paying back the principal and interest at the same time so that way you have a consistent payment amount monthly. The benefit is paying the least interest on the loan, but you have to pay back on the principal immediately.
Lending, Deposits, & Withdrawals
There are absolutely no charges or fees for Lenders to use the CoinLoan platform! There aren’t any charges for withdrawals in cryptocurrency or fiat either!
However, when depositing money you can expect a Visa or Mastercard fee (if you choose this method) of $2 EUR and 4.2% off of the deposit amount which could definitely entice you to deposit instead in Cryptocurrency or Fiat Currency directly.
Borrowing Through CoinLoan
The benefits of using CoinLoan, especially when borrowing, are immense. You plan on HODLing your Bitcoin or Monero for a very long-time, but it can get very stressful holding on to the assets if you do happen to have a quick need for funds, but don’t want to sell. This is simply where CoinLoan shines.
On average, typical asset-based borrowing is an expensive process that involves having a bank involved and they may lower their evaluation standards because you are bringing money to the table, but the typical underwriting costs and monitoring of the loans create the high expenses.
Plus it’s notoriously harder for regular people to do asset-based lending for small amounts of money.
Loan Size & Supported Stablecoins
With CoinLoan, your loan size can be as small as $1 dollar to as much as you need based on the cryptocurrency you are willing to put up against it. This makes things incredibly easy for you to use over and over again for any quick loans you are in need of.
The available stablecoins on CoinLoan are:
- True USD (TUSD)
- Dai (DAI)
- Tether (USDT)
- Paxos Standard (PAX)
- USD Coin (USDC)
The Real Review: CoinLoan – Is It Even Worth It?
CoinLoan solves a very specific problem in the need for liquidity for cryptocurrency HODLers. They solve this problem very well and they do it incredibly streamlined and easy to follow for even the most novice user of P2P asset-backed lending.
If challenges ever come across your life, like the ones that involve needing liquidity quickly, or banks requiring you to have a certain credit score, or not wanting to sell your cryptocurrency.
Then CoinLoan could definitely be an option for you to consider investigating further into.
We love what CoinLoan does and they have created a product that stands by to help the cryptocurrency community thrive and continue towards the steps of growth.
If you’d like to try it out, feel free to check out the CoinLoan P2P Lending Platform here.