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How to apply for a stable coin loan? Can I get it instantly?

How to Get a Stablecoin Loan Instantly?

How to Get a Stablecoin Loan Instantly?

The importance of knowing what you’re getting yourself into before actually going on with it cannot be overemphasized. In this guide, you’ll discover how to obtain a stablecoin loan but let’s start by answering the question on your mind right now, “What is a stablecoin?”.

Stablecoin is a type of cryptocurrency that is backed by an asset, and being asset-backed helps to protect it from excess volatility and stabilizes its price.

Since its inception in 2014, stablecoins has opened doors for investors and non-experts to come in to enjoy the benefits such as the decentralization, speed, trust, and transparency of transactions blockchain has to offer as well as the stability that can be gotten from using fiat currency.

The idea of a stable cryptocurrency has been embraced by the cryptocurrency market as it is currently the ‘safe’ haven for most transactions especially when the market suffers massive dips.

What is a Stablecoin Loan?

Now that the concept of stable crypto coins has been explained in simple terms, let’s go further into the subject of what a stablecoin loan is all about.

Stablecoin loan is a cryptocurrency loan that can be obtained after offering your crypto assets with high volatility as collateral.

It is not advisable to obtain a crypto loan in the form of high volatile cryptocurrencies like Bitcoin and altcoins. The reason for this is because the value at which you obtained the loan would have either increased or decreased when it’s time for repayment. This volatility can alter a lot of calculations that might have been made beforehand.

With stable cryptocurrency, there would be no need to worry about the ups and downs of the cryptocurrency market because it was built for stability.

For a stablecoin loan to be obtained, the loan must be over-collateralized to serve as a means of insurance for the lender because of the volatility of the cryptocurrency market.

This means that you’ll need to pledge a certain amount of your crypto asset (Bitcoin for example) to access a percentage of the value of that asset in the form of stablecoins (USDT for example). This is usually calculated using something called Loan-To-Value ratio (LTV).

So, in case the value of your crypto asset increases or decreases, it would not change the initial calculations that have been made when it’s time for repayment of the stablecoin loan.

Reasons to Get a Stablecoin Loan

Reasons to Get a Stablecoin Loan

There are a lot of uncertainties surrounding the price movement of cryptocurrency and the one way to make sure those uncertainties don’t cost you a whole lot is by obtaining a stablecoin loan.

Other benefits that can be enjoyed from obtaining stablecoin loans include but are not limited to:

  1. Speed

Amongst other things, the speed at which anyone can have access to a stablecoin loan is impressive. It doesn’t take a week, heck it doesn’t even take 24 hours to obtain a loan. Does it take an hour? Still no.

Let’s assume the crypto lending platform you made use of is taking your time, we’ll use 30 minutes max as the worst-case scenario. On a normal day with a great crypto lending platform, it shouldn’t take you anything less than 10 minutes to obtain a stablecoin loan.

  1. Low-interest rates

After discovering what is stablecoin and how stablecoin loans work, it would be inadvisable to get a loan from a bank. Unlike the traditional banks’ high interest rates, the interest rates on stablecoin loans have been made as low as possible to open the eyes of people to the benefits they’re missing by not taking stablecoin loans.

  1. Transparency 

The overall financial transactions can be monitored, how the interest rates are calculated, when the loan obtained is due, and a whole lot more. 

Everything would be easily accessible and be put out there so people can know when they’re being overcharged. This is all thanks to the power of Decentralized Finance (DeFi).

  1. Flexibility 

Access to the level of control that you wouldn’t get from obtaining a normal loan is made possible with a stablecoin loan. If obtaining a stablecoin from a DeFi lending platform doesn’t feel safe enough for you, you are free to make use of a Centralized Finance (CeFi) lending platform and no one would query you.

Options have been made available, so it’s left to everyone to choose what works for them when obtaining a stablecoin loan.

Why not to Take out a Stablecoin Loan?

Why not to Take out a Stablecoin Loan?

Unless you wish to sell off your crypto assets prematurely or decide not to leverage the value of your assets, I see no reason why not to take out a stablecoin loan.

As long as the cryptocurrency lending you’re making use of is super secure and has your best interests at heart, you shouldn’t have to worry. 

CoinRabbit is one cryptocurrency lending platform that checks off everything on the list – security, speed, transparency amongst others.

How to Borrow Stablecoin on CoinRabbit?

It’s amazing how super easy and fast it is to borrow stablecoin on CoinRabbit. Just follow the below steps and you shouldn’t have any problems.

  1. Head over to Coinrabbit.io on your desktop or mobile device.
  1. Input the amount of cryptocurrency asset you’re willing to pledge as collateral and you’ll have your Loan amount, Annual interest rate, and Price down limit automatically calculated for you.
  1. You can change your collateral asset as well as the loan amount by clicking the drop-down to choose your preferred option.
  1. Click on “Get Loan” when you’re done choosing your preferred options.
  1. Input your stablecoin (USDT or USDC) address where you’d like to receive your loan, verify your phone number as well by inputting the code sent, and click on “Confirm”.
  1. Send the collateral amount you entered to the address provided.
  1. Wait for a few minutes for the loan to be processed (this would normally take less than 5 minutes).

After confirmation has been done, you’ll receive your loan instantly. If you encounter any problems, you can always reach out via email, Twitter, or using the Chat feature.

Post Author: Diana Kelley

Hey! I'm Diana, CoinRabbit's blog manager. I want our blog to be the most useful and interesting!
Also, I love rabbits.