Blog

Peer to Peer loans are so much better than traditional loans offered by your traditional banks

When you first hear the words “Peer to Peer” or see the term P2P you might immediately think this is a scam, or this is not a reliable thing. Indeed, if you rely on someone else to repay money you loaned in the past then without a collateral you are putting yourself in a bad place.

However, if there is a collateral in place, a proper one, then there is nothing to worry about, literally nothing.

How do you ensure the collateral is something that you can trust?

Before answering that question let us explore a bit about crypto. Crypto has brought a revolution into our world. crypto currencies have changed the way our financial world works. We used to have our bank opening hours between Monday and Friday and the stock market stops trading on Friday every week. However crypto currencies behave differently. These currencies fluctuate all the time, whether it's the weekend or a normal working day, whether it’s Christmas or Easter.

Crypto has no bank holidays and crypto has no weekends. And crypto has become so reliable that with most of its currencies transactions once sent cannot be cancelled or revoked. A crypto transaction, unlike a credit card transaction, cannot be subject to reversals.

Now to answer the question - since transactions in crypto are irreversible, final and cannot be manipulated - then you can rest assured if you set a collateral based on crypto then that collateral is generally even safer than having someone’s house placed as a collateral.

Why do I need to know all this? What do I gain from it?

If you ever wanted to trade a certain crypto currency or believed this currency is going to boom - then with leverage you could make so much profit.

Let’s say you have $1,000 in your bank account which you want to use to buy Bitcoin, or let’s say those $1,000 are held in Tether USDT currency so you can easily exchange these $1,000 into Bitcoin.

Let’s say the Bitcoin price is $40,000 (at the time of writing, 28-07-2021, that is actually today’s Bitcoin price as well).

So $1,000 is worth 0.025 BTC.

Let’s assume hypothetically the Bitcoin price goes up to be worth $50,000 and now you want to sell the Bitcoin and get back your dollars, then 0.025 BTC would be worth $1,250 - so you basically made with your own money 25% profit on your initial investment.

But this is when P2P, collateral, and all the other terms - come into play.

If you deposit the $1,000 into a loan account, and get $666 against it then you have $1,666 in Bitcoin! That means if Bitcoin goes up to $50,000 and you want to redeem it then it means you basically started with $1,666 / $40,000 = 0.04165 BTC. This has gone up in value so it’s worth now $2,082.50.

Deduct the $666 from it and you would end up with $1,416.50.

That means you made a profit of 41.65% on your own $1,000!

So which option is better? Making 25% or 41.65%

But the loan is not free of charge

True, no one would give you a loan for free. However, the loan allows you to leverage. The leverage allows you to make more yields (%) on your own money.

Taking the example above into consideration, yes, 41.65% is not a net profit but your net profit should be at least 35% or even more.

This is where MyConstant comes into play

MyConstant allows you to loan against your own crypto, just as explained above. With MC you can invest in many currencies you like and increase the yields on these investments. You can find popular currencies and extremely rare ones. In addition, it also has extremely useful features that competitors don't have. Let us explore them a bit.

Feature #1: Crypto Withdrawal

Many P2P networks don’t allow you to withdraw your loan in crypto. They want you to pay them fees and by doing so your margins and yields go way down. MyConstant doesn’t do it. With MC you can rest assured you can withdraw your profits in crypto so you don’t lose anything from that investment other than the sending fees.

Feature #2: Supported Cryptos

At the time of writing websites like Blockfi have only 3 supported crypto currencies. Celsius supports 28 different ones. These numbers are not enough to provide you enough liquidity. What if you want to change your mind and choose a different crypto but it’s not listed? This is why you have to choose a website that provides you as much flexibility and variety as possible.

Feature #3: Recall the loan

Some websites will force you to stay with the loan all the way. That’s a losing proposition because if you cannot get out of the loan when you want to then how can you make profit this way?

Feature #4: Auto topup

If you are looking for a good website you might also want to deposit $100 every week or so and convert it into Bitcoin. By having an automated topup feature you can take advantage of it and increase your leverage even more - if it goes down you can add more, and if it goes up you have more money to make and better yields to enjoy.

All of the above shows why MyConstant is one of the top sites for this purpose.

Don’t settle for less. When it comes to your money choose a reliable website you can trust and get the most out of. Good luck.

Sign up to MyConstant