Value Nomad

September 29, 2020

Nexo Review (Credit line backed by your Stablecoins)

Nexo Review: Let’s check out a platform that gives users a line of credit backed by crypto assets (including Bitcoin and Stablecoins).

What is Nexo? Nexo Review:

Nexo is an innovative platform in the blockchain and cryptocurrency industry. It gives users a line of credit when they deposit cryptocurrencies in their Nexo accounts. The size of the credit line depends on the value of your deposited crypto-assets. This Nexo review will show you exactly how.

nexo review

Users can receive their loan money in the real world or fiat currencies. Currently, Nexo supports over 45 currencies in over 200 locations worldwide.

You can opt to receive your loan funds directly into your local bank account or obtain a Nexo Credit card, which you can use online, in-stores, or at ATMs.

Additionally, the platform’s users can choose to save money in their Nexo accounts. Depositing EUR, GBP, USD, TUSD, USDT, USDC, PAX, or DAI will earn you 8% pa from day one. There are no fees or strings attached to the savings facility.

To date, the company has advanced over $700 million in financing across 200,000 Nexo users. In contrast, the platform has received more than $1 billion in crypto loan requests.

Nexo allows users to stay invested in cryptocurrencies while freeing some funds and providing liquidity.

Nexo Features at a Glance

  • Loan applications: Over 1,000,000
  • Employees: 130+
  • Company credit rating: BBB-
  • Company Location: London, UK
  • Interest Rates: from 5.9% APR
  • Loan Types: Worldwide Private Loans & Commercial Loans

How Nexo Works

Crypto-lending is still an emerging field. As such, it’s best to understand in detail how a platform works before you borrow or invest. Here’s the step-by-step process to borrow and or invest.

#1. Determine how much you can borrow

While Nexo offers loans to users, it doesn’t do so in the traditional sense.

Nexo users put up their crypto-currencies as collateral. In most cases, you can access up to 50% of the total market value of your deposited crypto-asset as credit.

For example, if you put up 1 BTC as collateral, and the value of BTC = $10,000, Nexo would allow you to borrow half of that, equivalent to $5,000.

#2. Deposit cryptocurrency

If you wish to proceed in getting the loan, you need to deposit your crypto-assets.

Head over to the deposit page on your Nexo account, select the digital currency you intend to use, and you’ll receive a special address to make the deposit. Once validated on the blockchain, funds will appear in your Nexo account.

#3. Withdrawing Funds

You can view your credit limit once your crypto-currencies hit your account. To access the money, request a withdrawal to your local bank account in fiat money. It should take no more than a few days to get the money.

Alternatively, you can obtain a Nexo credit card and get the funds loaded. The card allows you to spend the money online, in-stores, and at ATMs.

#4. Loan Repayment

Note, even if you put up collateral, you still need to repay the loan. Luckily, you can choose to pay in a different currency from the one you received the funds. For example, you can pay in USD, EUR, or GBP.

You can also settle your loan in a supported cryptocurrency.

Loan repayments are immediately reflected in your account.

Safety, Regulation, and Tax

The crypto-industry is awash with scams and cyber-criminals out to make a quick buck. The safety of your cryptocurrencies is paramount.

To that end, the company has implemented different security measures to safeguard your money. These include KYC policies, two-factor authentication, custodianship, and insurance with all customer funds held in cold storage by BitGo.

Nexo is also a tax-efficient strategy to get liquidity from your cryptocurrencies without selling and incurring capital gains tax.

When it comes to regulation, the company has emphasized it’s a security token. As such, it’s compliant with the Securities and Exchange Commission Regulation D Rule 506(c).

How to Open an Account on Nexo

Nexo’s registration process is simple and straightforward. All you need is a valid email and a strong password.

Click here to open an account on Nexo

Once your email is verified, you’re immediately transferred to the platform where you can fill in additional details if you wish to go for a loan. Details required include:

  • Date of Birth
  • Address
  • Phone number
  • Official name

After phone number verification, you’ll be approved to deposit crypto and withdraw fiat currencies from your account.

To enhance account security, you can opt to supply Nexo with additional information such as a bio from your passport, ID, or driving license.

Verification raises your transaction limit by up to $200,000 per month of fiat and unlimited crypto withdrawals.

How Much Can You Borrow on Nexo?

Nexo uses the value of your deposited crypto-currency assets to determine your credit limit. The platform uses a Loan-to-Value (LTV) system. Your specific ratio depends on the cryptocurrency deposited.

Here are some LTV ratios as listed by Nexo:

Nexo: 15% LTV

Stellar Lumens (XLM): 17% LTV

Bitcoin (BTC) and Ethereum (ETH): 50% LTV

Stablecoins: 90% LTV

Ripple (XRP): 40% LTV

Nexo offers you a lower LTV if a particular currency is going through a period of high volatility.

How Much Interest Does Nexo Charge?

The platform utilizes two fixed interests based on whether you use the platform’s native token.

You get a fixed rate of 5.9% APR when using the Nexo token or when the token backs your loan

Alternatively, you pay 11.9% APR in interest if neither of the conditions applies to your loan.

nexo chart

Who Can Borrow/Invest in Nexo?

Anyone who holds cryptocurrency can participate on the platform no matter their location. Loans are fully collateralized, requiring no credit history or approvals.

What Currencies Does Nexo Support?

The platform supports a variety of currencies, both fiat, and crypto.

You can put up the following coins as collateral: BTC, ETH, XRP, LYC, XLM, BCH, EOS, Stablecoins, NEXO, BNB.

Furthermore, the platform supports over 45 different fiat currencies. They include all the major currencies such as USD, EUR, AUD, GBP, JPY, CAD, SGD, and other exotic currencies including, UAH, PKR, RON, PHP, among others.

nexo coins

Pros for Borrowers and Investors

  • Advisory Board consists of industry heavyweights such as TechCrunch and Polymath co-founders
  • Led by an award-winning team of professionals and regularly audited by Deloitte
  • Secure tokens providing income in the form of 30% of company profits
  • No tax liability using the Nexo Token
  • Ability to liquidate your cryptocurrencies without selling them
  • Tax efficiency since you don’t sell your appreciated crypto-asset
  • 8% return on Euro deposits with interest paid daily
  • Fast loans with no credit checks

Cons

  • Longer approval periods that can cause delays
  • Cryptocurrency is a volatile asset
  • Margin calls possible
  • An unregulated and untested concept

Nexo Verdict

Our Nexo review has shown that Nexo is a game-changer in the crypto market. It’s taking advantage of the blockchain, decentralization, and increased cryptocurrency ownership.

They’ve simplified the platform, with a simple, easy-to-use interface. The company is already regarded as an industry leader and a pioneer in this emerging space.

On the downside, cryptocurrencies are highly volatile. The market experiences huge price swings from day-to-day. You could be required to deposit more cryptocurrency to shore up shortfalls in your collateral.

Take extra caution and due diligence when investing in crypto-backed assets.

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 Nexo or in any other peer to peer lending platform? Leave your thoughts and questions about this Nexo review below.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Exit Popup for Wordpress