At some point in your life, you’ll need to get a loan. In fact, if you’re like most adults, you’ve likely already received a loan of some kind. For the average person, most major purchases will require a loan whether it’s a car, a house, or college tuition.
The truth is, money lenders know this. They have a service that is essential, which gives them an unbalanced and unfair amount of leverage. Not only that, but it’s not easy for startup companies to compete with established major players and vested corporate interests. As a result, most loans available today are a bad deal for the borrower. They not only charge exorbitant interest rates but also sky high “origination fees”, late fees, penalties — you name it.
Celsius Network isn’t a traditional money lender. We wanted to utilize the power of cryptocurrency to give our community loans that actually make sense and work in the best interests of the borrower.
Join us as we go over the top reasons why a Celsius loan beats a traditional loan every single time.
Untrustworthy vs. Trustless
If you want to get a loan from a traditional money lender, they need to trust you first. But what is trust, exactly? The idea is that a lender will look over available records to determine if the borrower is a safe bet. Lenders want to make money, and they can’t make money if they lend to people who don’t repay their loans.
Lenders typically establish trust based on things like the borrower’s credit score, employment history, cash and other liquid investment holdings, and so on. In some ways, this seems pretty reasonable. However, there is one big problem with this. Building up the type of trust necessary to secure a large loan such as for a car or a mortgage is incredibly difficult and can take years, if not decades.
For a young person just out of high school or college, they are unlikely to have much of any credit history to speak of. As such, when they apply for their first loan, they will be forced to pay the highest possible interest rates and be given the smallest size loan — if they are even approved at all. To make things worse, young people are the least likely to have many years of consecutive stable employment. This is doubly true for individuals that participate in the so-called gig economy, are self-employed, or are freelancers. Traditional lenders will quickly turn their noses up at anything that doesn’t fit within their perfectly square expectations.
Celsius approaches trust from a completely different perspective. That being, we utilize the ideology of cryptocurrency which is to not rely on trust at all. Celsius loans don’t require you to have any kind of credit score, employment history, or anything else. Simply deposit your cryptocurrency holdings and borrow against it at a competitive and predictable rate. With Celsius, you will never need to beg for a loan officer to believe you or trust you. Celsius doesn’t discriminate based on your type of employment or how old you are.
Simply put, we think discrimination sucks. We believe our method is better, and a lot more fair.
Points of Interest
Traditional money lenders are not very competitive amongst each other. They know they have a product that everyone needs. They also don’t fear disruption because it’s simply too difficult for young companies to enter the space. As a result, lenders are essentially an oligopoly. That being, the industry is made up of a handful of players that all operate on the same rulebook. That’s why in the United States credit card interest for someone new to credit can be upwards of 36%. In other countries, these rates can be even more absurd with Brazil clocking in at a whopping 72%.
The reason why money lenders like banks and payday loan companies can charge such high rates is simply because they can. They know that borrowers have very few choices, especially if they are new to credit or have a spotty credit history. On the flipside of that, the wealthiest individuals can get access to cash loans at rates hovering around just 1%-3%.
At Celsius, anyone who applies for a loan can see our interest rate listed publicly and transparently. We won’t give someone a sky-high interest rate because of their credit history, or give someone a near zero interest rate just because they’re already wealthy.
Our borrowers can choose interest rates for crypto-backed loans at 4.95%, 6.95%, or 8.95% based on the amount of collateral that’s put up for the loan. If a borrower is willing to put more collateral against their USD loan, they will receive a lower interest rate. Even with the lowest collateral percentage, our interest rates are still far below what a similar loan would be at a bank, credit card or payday loan company because we believe that loans should be accessible, transparent, and nondiscriminatory.
Protection from the bottom
The crypto community is made up of brave pioneers that are willing to take on the risks of holding a comparatively new asset class. But being a pioneer comes with risks. Let’s be honest — sometimes the crypto market takes a dive and it’s painful to see one’s holdings valued less than they were days or weeks prior.
Let’s imagine that the crypto market sees a sharp or sustained decline. Then you have a situation where you need money, but some of your assets are tied up in cryptocurrency that is currently on a downward trend. What should you do?
In the days before crypto-backed loans, your only choice was to sell your coins at a loss in order to meet your immediate need. Then, in the future when prices have risen, to rebuy your coins at a higher price, thus facing an even steeper loss.
With Celsius loans, this is no longer necessary. If you face an emergency and need cash, simply borrow against your coins. Once you repay the loan amount, you will have all of your coins back without ever having needed to sell them at a loss or rebuy them at a higher price. This is also a great way to save on your taxes. Selling and buying coins are both taxable events, whereas borrowing is tax-free.
Traditional moneylenders, on the other hand, have no such services. On the contrary, most of them don’t even acknowledge cryptocurrency as being a legitimate source of money. If you have an urgent need for cash and are holding a lot of crypto, the only way the bank will care is if you sell it all at a loss.
Just say no to selfish bankers
We know that our numbers are better. Getting a loan from Celsius could save you hundreds if not thousands of dollars. We don’t charge ridiculous fees or discriminate based on income or history. It seems like we’ve got everything better than what traditional lenders offer. But, there’s one thing more that the lenders will never be able to beat us on.
Celsius Network operates as a not-for-profit company. You read that correctly — we are not operating as a for-profit company. That means if we are able to give you a lower interest rate on a loan, we will. Likewise, if we can give you more interest on a deposit, we will do that too. If there’s a way to make getting a loan from us easier, you can bet the farm we’ll be doing that as well.
We say this a lot, but it’s worth repeating: Celsius is all about our community. While bankers work together to keep interest rates high and fees off the charts, we are the exact opposite of this. We want the crypto community to be healthy and able to grow.
Sure, we could operate under a maximum profit extraction business model, but we know that’s not good for the community. And if it’s not good for the community, then it’s not good for cryptocurrency in the long-term. And what’s harmful to cryptocurrency is harmful to us. We know that everything is interconnected, which is why we want to provide the community with essential financial services that can really make a difference.
That’s what makes Celsius better. That’s also how we can make the community better.
About Celsius Network
Celsius Network is a democratized interest income and lending platform accessible via a mobile app. Built on the belief that financial services should only do what is in the best interests of the community, Celsius is a modern platform where membership provides access to curated financial services that are not available through traditional financial institutions. Crypto holders can earn interest by transferring their coins to their Celsius Wallet and borrow USD against their crypto collateral at interest rates as low as 4.95% APR.
Download the Celsius Network app and start earning interest on your crypto today ➡️ celsiusnetwork.app.link