The crypto economy is volatile, and simply holding crypto isn’t the same as holding cash. While prices have tended to increase quite quickly over time, many people want something more. Crypto borrowing and crypto-backed loans are helping create additional opportunities in the broader crypto ecosystem.
Nexo Crypto Credit Lines
Cryptocurrency Backed Loans
Platforms like Nexo offer passive income opportunities similar to those provided by high-interest savings bank accounts. One of the main differences between the two is that crypto interest rates tend to be very high. This is possible because platforms like Nexo offer crypto financing where you can borrow cash or stablecoins using your deposited crypto assets as collateral against the loan.
Nexo’s flagship financing product is their instant crypto loan in the form of a line of credit. Let’s look into how it works and the kinds of offers users get.
About the Company Nexo
The Nexo platform is mainly a crypto wallet but includes several other features like a built-in crypto exchange, crypto lending in the form of instant crypto credit lines and a card.
The Nexo card is usable with over 40 million merchants worldwide, but its primary purpose is to enhance your experience with Nexo. There are no annual fees, and you can also skip foreign exchange fees. Nexo’s features and services are centered around providing ease of access and high interest to a wide range of crypto investors. The company was founded in 2018 and now serves over 2.5 million customers worldwide.
What Are Nexo Crypto-Backed Loans?
Nexo crypto-backed loans are crypto loans secured by cryptocurrencies as collateral. Users can top up on Bitcoin and use some to secure a line of credit that:
- Is available for amounts ranging from $50 to $2 million
- Doesn’t require credit checks
- Is free of origination fees
- Doesn’t require monthly repayments
Is Borrowing with Nexo Safe?
When it comes to your ability to repay your loan, it’s your responsibility to ensure that you can meet the terms of your loan agreement before accepting a loan. Nexo is a transparent platform, so you will see all of the costs and requirements of your loan before you are given the opportunity to accept. There are no hidden costs and no hidden surprises. So, you can review all your responsibilities at your own speed before making a decision.
When it comes to the safety of your collateral and all account assets, Nexo does the work to make sure you’re as safe as possible. Nexo rigorously follows KYC and AML policies and employs state-of-the-art cybersecurity. This includes military-grade 256-bit encryption, bank-grade cold storage (class III vaults), and a $375 million insurance policy. In addition, their security infrastructure earned the ISO/IEC 27001:2013 certificate, meaning Nexo meets the highest applicable standard.
How Does a Nexo Crypto-Backed Loan Work?
Nexo’s loans are for fiat currencies or stablecoins and are backed by BTC or other accepted assets. Once you provide crypto to collateralize the loan, the line of credit is available to you immediately.
Nexo advertises its line of credit as easy to use and flexible. This claim is backed up by the low requirements, flexible borrowing and repayment arrangements.
Borrowers can get lines of credit for more than 40 fiat currencies. When users pull from their line of credit, funds are delivered by bank transfer within 24 hours in most cases. The repayment process is even more flexible, as you can repay in any of the supported fiat currencies or with crypto. In addition, there are no repayment restrictions, such as early repayment fees. So, you can repay partially over time or fully and immediately.
When it comes to rates, Nexo isn’t typically very expensive. This is particularly true for users ranking high on the loyalty tier system. Premium APRs start at 0% and top out at 1.9% (for Gold or Platinum users). For lower-ranking users and loans with high loan-to-value ratios (LTVs), APRs start at 6.9%.
To provide virtually risk-free, high-interest rates for all users hodling crypto in a Nexo wallet, all Nexo loans require collateral. This includes the best loans, which come with a 0% APR. This provides borrowers with very low-cost and thus lower-risk loans while providing other users with minimal risk and an easy path to passive income. Ultimately, the solution is designed to appeal to all Nexo users.
How Much Can You Borrow with a Nexo Loan?
Loan sizes for Nexo loans are anywhere from $50 to $2 million. The maximum loan amount is $2 million. Even larger amounts are available upon request. The minimum withdrawal is $50 for a stablecoin like USDT or USDC. The minimum borrowing amount for actual fiat currencies is $500.
Both the minimum and maximum amounts are very low and very high (respectively) when compared with traditional lenders. Nexo asks that borrowers keep compounding interest rates in mind. Both initial principal and accumulated interest go into repayments.
How Long Do Nexo Loans Take to Get Approved?
According to Nexo, loans are approved within a matter of seconds. Funds are then dispersed within 24 hours under regular circumstances. It should seldom take more than 24 hours to access your funds.
Nexo Crypto Credit Lines
Cryptocurrency Backed Loans
How Much Does It Cost to Get a Loan from Nexo?
APRs for a Nexo crypto loan start as low as 0%. The rate you get is determined by two main factors:
- Your loyalty tier
- The LTV ratio
This means that your interest rate is based on the ratio between the value of your NEXO and the total value of your portfolio. Therefore, the more NEXO Token makes up your portfolio, the better the rates.
There are 4 loyalty tiers:
- Base: No NEXO requirement; 13.9%
- Sliver: At least 1% NEXO; 12.9%
- Gold: At least 5% NEXO; 8.9% (if LTV > 20%) or 1.9% (if LTV =< 20%)
- Platinum: At least 10% NEXO; 6.9% (if LTV > 20%) or 0% (if LTV =< 20%)
What Are the Requirements to Get a Loan with Nexo?
The loan requirements are straightforward – you just need a Nexo wallet and enough assets to meet the collateral requirements for the loan you want.
If you are wondering how much crypto you need to secure the size of the loan you want, you can use Nexo’s calculator. All you need to do is choose your currency, then select the asset you wish to collateralize with. When you fill in the loan size, the calculator will tell you how much collateral you will need.
How to Get a Crypto-Backed Loan with Nexo
To get a crypto-backed loan with Nexo, you just need an account and a crypto balance.
Go to the Nexo website to make an account. Just click “Create Account” to get started. Once on the account creation page, just provide an email, create a password, and verify that you aren’t a robot.
When you’re done, click “Sign Up” and verify your email address. Next, you can click “Continue to your Nexo Account” after clicking on the verification link. From there, you’ll set up two-factor authentication. Now you can begin using your Nexo Wallet and exchange to acquire a crypto balance. Once you have enough to collateralize the loan size you’re looking for, you can move on to borrowing.
Other Products Nexo Offers
Nexo offers several other products for users.
Buy, Sell, and Swap Crypto on the Nexo Exchange
The Nexo Wallet is connected to the Nexo Exchange. Users can use the exchange to buy, sell, and swap the available coins.
Earn Interest on Your Crypto
Earning interest is one of the primary features Nexo offers. You can earn anywhere from a 1% to 20% annual yield on digital assets.
Nexo Crypto Credit Lines
Cryptocurrency Backed Loans
