CoinLoan Review: Check our opinions on one of the first peer-to-peer lending platform for loans backed by crypto assets (including Bitcoin and Stablecoins).
Are you holding digital assets? Do you need fiat cash but you do not want to sell off your digital assets? In this CoinLoan review, we look at an interesting platform that offers crypto assets backed loans and what they have to offer for investors.
Investing in Cryptocurrencies and P2P Lending
Peer to peer lending and cryptocurrencies arose and became more popular after the 2008 financial crisis. Both seeking to put the control in an individual’s hands. Peer to peer lending cuts out the traditional financial institutions, including banks by enabling people to lend to other people. This reduces the processes a borrower would have to go through to get a loan.
To the investors, peer to peer lending provides an opportunity to earn above-market interest rates, more than they would if they let their money lie in a bank’s savings account. This returns and convenience are some of the factors that have pushed peer to peer lending into a resounding success.
However, there are always risks involved with peer to peer lending. One of the major risks is the loan going into delinquency or default. Since most p2p loans are unsecured, this could mean total investment loss to the investor. This is where crypto assets come in.
Most people with crypto assets do not want to dispose them off because they may rise in value in a short time and they would miss out on the profits. And although businesses are increasingly willing to accept cryptocurrency as a mode of payment for goods and services, most still require fiat cash, which means a borrower would have to sell their crypto assets. This is something that most people are hesitant to do.
CoinLoan is the first peer-to-peer platform for crypto assets backed loans. It was established in the fourth quarter of 2016 with the development taking place throughout 2017.
The basic idea behind the platform is that you don’t have to sell your cryptocurrency, instead, you can use them as collateral for a fiat cash loan and receive them back when your loan is fully repaid. Two birds one stone? The platform is under the Financial Conduct Authority’s regulation in Estonia.
Opening an account on CoinLoan
The first step to investing or borrowing on the platform is opening an account. The first form requires you to enter a working email address and set a password, after you submit; the platform sends you an activation code to the email you entered. Enter the verification code to access the platform.
To verify your identity, click ‘My account’ ‘verification’. You will be required to enter personal details including name, date of birth, place of birth and phone number. The second step will require you to provide identification documents, passport. ID or Driver’s license. The platform will require you to upload scanned copies and a photo of you holding the document. The next step is to provide proof of address.
How to invest in CoinLoan
After submitting the verification code, you can access the platform’s lending market page where you can view the available loan offers and requests. The loan offers are for those who want to borrow, by clicking the offer; it provides additional details on the collateral amount needed, LTV, loan amount and term.
To invest, deposit funds into your account using TransferWise, SEPA or MasterCard. If you are using a card, select ‘My Wallet’ and choose ‘Card Manager’ to add a new payment card. You will provide a selfie with the card for verification. You can then create an offer by choosing your own loan conditions or selecting one of the loan requests to invest immediately.
Types of investments available at CoinLoan
The platform only deals with crypto assets backed loans. All the loans have either Ethereum, Bitcoin, Litecoin, Monero or CoinLoanToken (CLT) as collateral. Currently, the loans are in Euro, USD, GBP or RUB currencies or TUSD, GUSD or USDC stable coins.
CoinLoan Auto Invest
CoinLoan does not provide an auto invest tool currently.
How much can you earn on CoinLoan?
Most of the loans on the platform offer between 10% and 11% but an investor can up to 12% (estimated annual return). This is a competitive rate considering the minimal risk of investing on the platform. The platform also enables investors to set their own offers so you can lend at your rate.
There are no fees charged to the investor on registration, transactions, deposit or withdrawal.
Who can invest in CoinLoan?
The platform is open to investors worldwide but with small restrictions due to anti-money laundering regulations. Investors, however, must be above the age of 18 and possess identification documents.
- All loans are secured
- Possibility to invest in Crypto and fiat currencies
- Guaranteed repayment of funds
- Possibility to exchange crypto to fiat and back
- Low volume of loan offers
CoinLoan is an interesting platform for investors and borrowers. It offers borrowers an opportunity to access fiat cash without selling their crypto assets and investors a chance to earn interest. The platform gives extra security for investors but the returns may not be as good as in other platforms. Also, remember that the cryptomarket is highly volatile and could crash anytime.
However, the platform is still new, let’s see how it will evolve.
Other Crowd Investing Resources
For those looking for other similar peer to peer platforms to invest, you may want to read some of our other reviews. There are many peer to peer lending and investing platforms currently available, and you can diversify your interest income by using several of them simultaneously.
You can consider some other peer to peer companies checking our Mintos Review and our Viventor Review. Check our post on the best peer 2 peer lending platforms in Europe, and the best real estate crowdfunding platforms in Europe.
Are you already investing in CoinLoan or in any other peer to peer lending platform? Leave your thoughts and questions about this CoinLoan review below.