Here's the scoop on crypto loans for anyone interested.
Basically, these loans let you borrow regular money by putting up your crypto as collateral. So you can tap into your crypto value without having to sell.
It works like this:
1. You give a lending site your crypto to hold as collateral. How much you can borrow depends on how much crypto you put up, based on something called the loan-to-value ratio.
2. You and the lender agree on the loan's interest rate, length and when you'll make payments.
3. Once the lender verifies your collateral, they send you the loan amount in whatever currency you want.
4. You then pay back the loan on the schedule you agreed to. If you miss payments, the lender can sell off your crypto collateral to get their money back.
So in a nutshell, crypto loans unlock cash while letting you keep your crypto. But you risk losing your crypto if you default.
