Crypto bakced loans by SALT Lending

The cryptocurrency industry has really become mainstream over the past couple of years. Crypto adoption is happening rapidly around the world as more companies are adapting and investing in cryptocurrencies. Recently, the country of El Salvador in South America passed a bill making Bitcoin legal tender in the country.

The Decentralised Finance sector has become a central driving force of the cryptocurrency industry over the past year. A DeFi or decentralised finance company acts provides similar facilities that a banking institution does but has fewer requirements and the authority is decentralised. One of the most popular DeFi companies operating at the moment is Secured Automated Lending Technology (SALT), a crypto-backed loans platform. Read on to know what is SALT and how crypto loans work.

What are crypto-backed loans?

Crypto-backed loans are exactly what they sound like. Loans taken with crypto as the collateral. Secured Automated Lending Technology (SALT) has made crypto lending possible with the help of their platform. Crypto-backed loans can be highly beneficial for a certain set of people who find it hard to get loans otherwise. Many people who are in need of funds but cannot secure loans due to bad credit or other reasons can turn to SALT Lending for their funding needs, as long as they have cryptocurrencies as assets. SALT Lending provides business and personal loans to individuals or companies based on cryptocurrency that individuals deposit as collateral.

Individuals looking into getting crypto-backed loans need to get a membership with SALT Lendig by buying SALT Tokens. Once they have been accepted as a member, they can deposit their cryptocurrrencies into the SALT crypto wallet and in return, the loan funds are deposited into their bank accounts. Getting a crypto-backed loan is a simpler and hassle-free process, compared to getting a conventional loan from a bank, as the documents required and processes to be completed are minimal.

However, there are inherent risks associated with crypto-backed loans. If you put up a certain cryptocurrency as collateral for a loan and the value of the cryptocurrency drops significantly, you will have to provide additional funds as asset in the form of collateral to the company. On the other hand, if the price of your crypto climbs up, significantly, you will can end up with a handsome profit, even after repaying your loan.
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