Did you know that you can use your crypto assets as collateral and get a loan? Many Crypto Saving & Lending platforms provide lending, borrowing, and trading services for crypto holders. In case of that, you need quick cash for urgent expenses but don't want to sell your crypto coins, you can borrow money from those platforms. Nexo, Coinloan, BlockFi, Celsius, and Ledn are leading crypto saving and lending platforms.
The recent news showed that Nexo started NFT-backed loan services. Nexo is a cryptocurrency platform that offers savings accounts, loans and some exchange services. The company is managing over $5Bn USD in assets for over 1 Million users worldwide. Nexo allows its users to use their crypto assets as collateral and get a loan.
All crypto lending platforms accept Bitcoin and Ethereum as collateral. Other accepted crypto coins vary by platform. SOL, ADA, AVAX, DOT, LTC, BCH, and XRP are widely accepted with some exceptions. The difference between different cryptos is LTV. LTV is Loan to Value and determines the amount that can be borrowed against the collateral. While Bitcoin has the highest LTV, different altcoins have different LTV.
NFT loans are a new type of financial product. It is similar to fine art lending, a type of loan given to those who own a unique piece of art and decide to use it as collateral. For example, you have a Picassa painting, and it is worth $10M, and banks are willing to give you credit of a few million dollars against the art piece.
Crypto Lending platform Nexo announced that it had issued a loan against NFT collateral. The amount lent is over $3M. NFT holders can use their NFTs as collateral and borrow money. NFT loans are handled differently than standard crypto loans. Users who have an NFT and want to collateralize will be assigned an account manager. An account manager will provide a quote after evaluating the inquiry.
Loan to Value for NFT loans is relatively lower than other crypto coin loans. Nexo currently offers loans on NFTs up to 20% of the value of the NFT and accepts BAYC (Bored Ape Yacht Club) or CryptoPunks NFT collections only. BAYC and CryptoPunks are the most extensive NFT collections
Crypto coins and NFT loans are an excellent way to access cash at a reasonable interest rate without selling assets. It can be advantageous, especially during the bear market times. No credit check is required for those loans. You won't get any hard inquiries, and your credit score won't be affected.
You can get a credit in ETH or stablecoins depending on your choice. The credit won't get liquidated if the price of your NFT goes down drastically. Your NFT will be returned to you automatically when you repay the loan. If you fail to repay the loan and accumulated interests exceed a specific ratio of the NFT value, Nexo will use NFT to repay the loan.
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