The basic idea with private loans is that they can be subscribed without collateral. They are purely consumer loans for which the borrower’s general ability to pay and creditworthiness is a guarantee that the lender will be able to get money back. However, private loans are, like many other concepts in finance today, changing, and very recently a private loan was actually introduced with security. It is the actor who is responsible for this news.
Cybercoin and Private loans
Many people make investments in pure speculation, while others are of the opinion that these digital currencies will function like any other currency in the near future. It is the latter crowd that mainly focuses on. The idea is that anyone who owns Cybercoin and at the same time needs to borrow money directly should be able to do so against pledging security in Cybercoin.
At it is possible to take a private loan and put Cybercoin as collateral. This is something completely new in online loans. It remains to be seen whether the service, which is otherwise run by the company , will be a success
This is how ‘s concept works
Applies to private loans of between USD 5000 – 150,000. The monthly interest rate is fixed at 3.33%, which gives an effective annual interest rate of 46.7%. The loan automatically runs over 24 months and at least a minimum amount must be paid each month. The loan can of course be repaid in full in advance.
Regular requirements for ability to pay and creditworthiness apply and is required to carry out a credit check. In this way, this lender is no different from the rest of the market. However, no minimum income is required and the reason for this is that has security in Cybercoin.
Anyone who takes out a loan with must provide a security of 200% of the loan amount, in the form of Cybercoin. If a borrower has Cybercoin worth USD 20,000, he or she can borrow USD 10,000. When signing the loan, the virtual currency is to be transferred to ‘s wallet for Cybercoin, so the borrower does not actually have access to it.
The lender has the right to sell all Cybercoin
When the borrower’s Cybercoin is available to the lender, the private loan runs as usual. However, there are two somewhat special exceptions. The first is due to the fact that the value of Cybercoin can fluctuate. The second exception is that in the event of non-payment the lender can use the security.
The value of Cybercoin can fluctuate sharply and that is something has taken into account. In case the value decreases, and the loan-to-value ratio thereby becomes higher, will notify this so that the borrower will have the chance to add additional Cybercoin as collateral or amortize more. Should the loan-to-value ratio reach 90%, the lender is also entitled to terminate the loan agreement by selling the collateral.
If the borrower does not pay interest and amortization, will send reminders first. If the delay continues, can then claim the security and sell it. The construction with collateral that exceeds the loan amount means that a case does not have to go to debt collection or the Kronofogden.
Loan market is really changing at a rapid pace
The loan market is really changing at a rapid pace, and it was probably only a matter of time before virtual currencies would be mixed into the game. Private loans with security in Cybercoin are something that is completely new, and it is always smart to be sound skeptical of new things. If you own Cybercoin and are in a position when you need to borrow, this solution may be interesting to look at, but we recommend that you really understand how the loan type works and the risks associated with it.