Interest rates in almost all parts of the globe have hit an all-time low. Some have even went in the negative territory. This has left many individuals to have insignificant or zero returns on their bank savings. Of course, other investment options are available to individuals such as real estate and stocks. But these investment options are risky especially for beginners. If you are looking for an investment option that is legal, poses minimal risk and can earn you great returns, then you should look at Bitcoin. This article will focus mainly on lending and borrowing and how one can lend bitcoin and make money from it.
What is Bitcoin?
Bitcoin is a digital currency. And like physical currency it can be lent send borrowed. The best thing about digital currency loans is that they offer rather attractive rates both for lenders and borrowers. The process for applying for a Bitcoin loan is quite simple. You also need to apply for a digital currency loan. But instead of doing it in a bank, you need to set up an account on a website that facilitates Bitcoin lending. Before you can proceed to the next step, you will be asked to verify your information usually through email. After you have verified your information, you will need to specify the amount that you want to borrow, the loan time period and the interest rate that you are willing to pay for the loan. The website will then look for a lender who is willing to lend you Bitcoin at the specified terms and conditions then the loan process will be completed.
Just like with regular loans, Bitcoin borrowers need to maintain a good standing by making on time payments. If you have a good Bitcoin credit history then you will not have problems securing more digital currency loans in the future. As you can see, the rules are pretty much the same for borrowers of physical and digital currencies. Both types of borrowers need to maintain a high level of integrity if they what lenders to continue trusting them.
Good profit for lenders
If you are already a holder of Bitcoin then you can share some of your digital currencies to loan seekers and make money in the process. One of the best things about lending out Bitcoin is that it is not as risky as investing in stock market or real estate. It is a great way to earn returns for people who do not want to take risks when it comes to investing. Of course, there is still some risk involved. There is always the possibility that the borrower will miss out on payments or, worse, never pay the loan back. One of the things that lenders can do to mitigate the risk of lending our Bitcoin is to do a background check on the borrower and to lend only a small amount of Bitcoin.
The number of websites that are facilitating Bitcoin loans have increased in recent years. This is a testament to the fact that the digital currency is becoming more and more popular. Of course, not all of these sites are legitimate. This is why you need to choose a website well if you want to avoid being scammed.