Bitcoin lending or borrowing is a relatively new concept that can help you achieve mutual interest with the person you interact with. It is quite similar to regular banking – BTC lending platforms match you with someone who, for an example, needs BTC to invest in some idea. You borrow him your Bitcoin, again like with the bank, with a specific interest rate. Reason why those platforms exist is peer-to-peer transfer on which the lending is based, so basically, they exist in order to maintain the process of lending as fair as possible.
Bitcoin lending platforms create a healthy environment for the process of lending in more than one way, keeping it fair, accessible and safe. Also, there are some benefits comparing to the traditional banking. So, lending platforms offer:
– Quick access to the money, comparing to traditional banking, where sometimes one must wait for weeks to get his credit approved, with BTC lending platforms, entire process is a lot faster.
– There are no large taxes to some central institution or the bank itself. Borrower doesn’t get charged on any level, while the one borrowing the currency must pay between 1% and 5%, which is still a lot cheaper than traditional banking conditions.
– Bitcoin interest rates are much higher than those with the savings accounts. Monthly, lender can generate revenue based on interest rate that goes from 3% to 7%.
– Matter of safety is well regulated, since every transaction is hand approved. Every request is checked manually. That certainly guaranties some level of security, but still, it is risky and you should be careful.
So, why would anyone borrow money from someone this way? Most frequent reasons are business ideas, trading with cryptocurrencies and setting up mining rigs. Besides those three main reasons, there are even some practical, like refinancing old credits, buying new car, or even redecorating your home. People use them from all sorts of reasons.
There is a great deal of risk involved in this sort of investing. There are few tips you could use. Don’t trust anyone. Do not use those ‘auto-invest’ options. Do your own check. You should take the history of lending. If a person does not have clean sheet in the past, do not lend them money – not even if they didn’t pay back online once. Avoid lending to people without prior history of lending. Bitcoin exchanges offer safer conditions for lending, but with less interest, so if you are careful and patient, that could be better solution.
You can lend from India similar to lending from any other country. BitBond has established quite simple routine, but I must suggest you to avoid that platform, based on the reports online. RBI (Reserves Bank of India) still did not regulate the Bitcoin in the terms of legal status, so I would advise you to be careful.