Your cryptocurrency is worth more than you think, regardless of the current market price. Because now you can use your crypto assets as collateral to get a loan in the form of crypto-backed credit. Nexo’s instant loan platform could be the next generation of lenders without the hassle of initial credit checks and damages of overburdened debt.
Let’s take of look at how Nexo works to see if it is a worthy venture.
What is Nexo?
Nexo is an automated-online lending service that allows you to store your crypto in secure wallet. Your stored coin’s value is assessed in order to provide you with an appropriate loan amount — a percentage of your crypto value. Everything is completed without a personal background check; the only factor to get approved for a line of credit is the value of your cryptocurrency. Borrows can use their digital currencies to get fiat without selling their coins and losing money in a volatile market.
How Do You Use Nexo?
The platform accepts 6 different cryptos including Bitcoin, Etherum, Ripple, Binance Coin, and TrueUSD. There is even a Nexo token that rewards coin holders with 30% of the company’s monthly profit.
After you create an account, you can choose one of three verification processes — each level of verification increases your withdrawal limit. Then enable the two-step authentication to make a deposit. Use a wallet or cryptocurrency exchange address to deposit your digital currencies.
The calculator will instantly show you the fiat value of your crypto, the loan limit based on your type of coin, and your total loan amount if multiple coins are added. The more valuable the coin and the more assets you add to Nexo, the higher your loan limit will be.
You can start using your loan immediately using a free Nexo card, or transfer your loan to a bank account.
Benefits of Using Nexo
Unlike many loans, repayment options are flexible and can be paid through your crypto or through your bank account. The starting APR of 8% (if you use Nexo tokens or 16% for other currencies) is on the low-end of borrowing interest rates. Daily interest is automatically deducted from your line of credit, saving you from having to pay a monthly bill. Plus, pay as much or as little in repayment as you would like; there is no minimum requirement. But, the more you pay, the lower you will eventually pay in interest just like any other loan.
Since Nexo acts as a wallet, your loan amount increases as the value of your crypto rises. The wallet is also backed by SEC-approved BitGo and uses the KYC-compliance company Onfido.
Another great feature of Nexo, is that you still own your crypto. You can withdraw your coins by paying off part or all of your loan, especially if the cryptocurrency market skyrockets.
While there are always risk factors when taking out a loan, a crypto-backed loan allows you the flexibility to keep your assets and possibly increase the value of your loan. Nexo, therefore, might be a good option if you are thinking of selling your crypto to make large fiat purchases in a down market. Instead of losing the value of your coins in an exchange, you can use them as a form of collateral while getting the fiat you need.
You can sign up for free here.
Coin Colony does not endorse any loan service companies. Please do your own research before placing your cryptocurrency into any wallet, loan company, or investment venture.