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How to Get Crypto-backed Loan with 0% Interest?

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by Andy Watson · 5 min read
How to Get Crypto-backed Loan with 0% Interest?
Photo: Nebeus

Nebeus Quick Loans let you borrow up to 500 dollars, pounds, or euros at 0% interest for a 2.5% loan origination fee.

Borrowing money can be a vital part of growing a business, pursuing financial opportunities, or paying for emergency household expenses. However, the cost of paying interest fees on these loans can limit the usefulness of some funding options, especially for small-scale scenarios.

There are ways to borrow money without paying any interest, however. Although these are not free loans, as they have other fees and limitations, they can provide invaluable options for getting the funds you need or managing debt to control the interest from other sources.

In recent years, loans backed by cryptocurrencies have become an increasingly popular way to borrow money, and some crypto lenders, such as Nebeus, are offering 0% interest loans. If you have a wallet full of cryptocurrencies, these can allow you to generate more funds using those coins without actually losing any of the cryptocurrencies you have invested.

What Is a Crypto-Backed Loan?

Crypto-backed loans are more straightforward than they sound. To get a crypto-backed loan, you transfer cryptocurrency to a crypto platform as collateral for your loan. The amount of collateral you must provide varies between platforms. For example, Nebeus allows you to loan up to 80% of the value of the cryptocurrency you use as collateral.

Once you have completed repayment of the loan, the crypto you provided as collateral will transfer back to your crypto wallet. Ensure that the platform you borrow from has an adequate insurance policy to ensure your funds will be reliably reimbursed. Nebeus places the collateral for crypto-backed loans in vaults insured up to $100 million against theft, third-party hacks, fraud, and loss of keys.

0% Interest Crypto Loans

Most cryptocurrency loans don’t offer 0% interest. Interest rates on crypto-backed loans are generally higher than loans for fiat currency, with some lenders offering the lowest interest rate of 8% or more. More options are beginning to appear, however.

Today, there are only a handful of crypto platforms offering a zero-interest loan. These vary significantly from one platform to the next, so make sure you find the lender with the right deal for both your borrowing needs and your crypto holdings.

Nebeus is one of the first crypto platforms to provide small, short-term loans that don’t charge interest. This is part of the platform’s ongoing goal to bridge the gap between cash and crypto by enabling people to use and benefit from the cryptocurrencies they have invested in, while still holding onto their investment.

Nebeus Quick Loans let you borrow up to 500 dollars, pounds, or euros at 0% interest for a 2.5% loan origination fee. The interest rate is fixed at zero for the 3-month duration, with a loan-to-value ratio of up to 50%. The debt can be repaid at any time without fees.

As a result, when you need a quick cash injection, you can instantly borrow the funds using your cryptocurrencies and immediately get your crypto back when you have the money to pay back the loan.

In the meantime, your coins are completely secure. Cryptocurrency held by Nebeus as collateral is insured up to $100 Million by Lloyds of London, and stored on offline servers entirely disconnected and air-gapped from the Internet.

Unlike a credit card, one of the advantages of crypto loans is that you can acquire the funds immediately once you have an account. They are also pre-approved, which means you don’t need to pass a credit or background check to get a loan, although there is an identity and anti-money laundering check when you open the account.

Why Get a Crypto-backed Loan?

There are plenty of reasons you might need a short-term, zero-interest loan. Why should you look to crypto-backed loans instead of more traditional methods?

The main advantage of crypto-backed loans is that you can create liquidity from your crypto investment by using your cryptocurrency as collateral for a loan while still holding onto the asset itself. The right loan-to-value ratio creates a new avenue for borrowing to anyone with even relatively small crypto holdings.

More importantly, it means you can keep generating the cash you need without selling off any of your coins that are rising in value. Nothing stings quite like being forced to sell at the wrong time due to a short-term cash problem, and crypto-backed loans help avoid this situation.

Another critical reason is the instant availability without a credit check. Traditional borrowing can involve weeks of filling out forms and sending documents. Crypto-backed loans bypass the usual gatekeepers like banks entirely. Nebeus loans can be acquired instantly, and the initial account verification process can take less than 15 minutes.

All you need to get a crypto-backed loan is the cryptocurrency to serve as collateral, rather than relying on a credit score that can take years of financial management to correct. This makes them highly suitable both for emergency borrowing and for creating short-term liquidity for further investment.

Conclusion

While your bank may not offer you a personal loan with no interest, this certainly does not mean you can’t borrow money without paying any interest. Besides the smart management of introductory zero interest offer credit cards and zero-interest bank overdrafts, Crypto lenders like Nebeus have created new ways to borrow that expand the range of flexible options for avoiding the risk and cost of high-interest loans.

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Andy Watson
Author Andy Watson

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