What is Lendo?
Lendo is an innovative lending platform where crypto assets are used as collateral by fully FCA licensed and regulated brokers.
How are loans are provided against cryptocurrency assets?
- No credit checks required
- Repayment to lender guaranteed via multi-signatory smart contracts
- Lending is not limited geographically, so the market is expanded for loan companies
- Acceptance of loan applications is faster due to blockchain technology
How does the platform operate?
Borrowers receive a loan in fiat currency up to 60% of the value of their crypto assets. The crypto assets are stored in the Lendo ‘Escrow’ Vault, which is an ultra secure proprietary software platform. The assets remain in the Vault until the loan is repaid at which time they are returned to the borrower.
How is the crypto collateral value calculated?
As a general rule, most lenders will calculate the value of the crypto collateral by assessing the moving average of the crypto currency over the 30 days prior to the loan application. In some cases, should the volatility index of a particular crypto currency be particularly high, the average value may be calculated over a 90-day period.
How can I provide loans via Lendo?
Providing you are a fully FCA regulated and licensed broker (initially limited to UK only) you can join the Lendo network. Lendo will provide you with the support and expertise to expand your business into the use of crypto currency as collateral for loans.
What risks are involved?
These are minimal, compared with the traditional lending process. The Lendo ‘escrow’ vault with optional smart contract system guarantees that should the borrower default, the necessary amount of crypto assets placed in the Lendo Vault will be released to the lender to repay the debt.
What currency can I provide loans in?
Initially, it is recommended that euro and sterling loans are provided to avoid any currency exchange loss in transactions.
What cryptocurrencies are accepted as collateral?
Currently Lendo only accepts Bitcoin, Ethereum and Litecoin as collateral. But other alt-coins may be added in the future. The Lendo token will be accepted by Lenders once it is listed on exchange.
What interest rates are charged on the loans?
That is the decision of the individual lender.
Do I need to state a purpose for my loan?
No, you can get a loan for any purpose.
How do I get a Lendo loan?
Sign up on the website and we will put you in touch with one of our network of lenders.
How much can I borrow?
You can borrow up to 60% of the value of your crypto assets in the fiat currency of your choice.
What risks are there for the borrower?
None, providing the loan is repaid in full. Your loan is recorded on a blockchain smart contract that guarantees nobody can touch your assets offered as collateral. When the loan is closed your crypto assets are returned to you. During the period of the loan your assets are stored in the ultra secure Lendo Vault, where they will continue to follow the market value.
What crypto assets can I offer as collateral?
Currently Bitcoin, Ethereum and Litecoin, but others will be added in the future.
In which currency can I get a loan?
Initially, it is recommended that loans are in Euros or GBP to avoid any currency exchange loss in transactions.
What documents do I need to supply to receive a loan?
When you register with Lendo you will be asked for standard KYC documents and to supply proof of your crypto assets. Acceptance of the crypto assets as collateral is subject to the normal Terms and Conditions and compliance procedures.
What is the difference between Lendo and traditional loans?
You will be notified if your assets dip below the LTV ratio agreed with the lender. You can do the following:
- Add further crypto asset to your existing collateral
- Make a top up payment on the loan
- Repay the loan, by liquidating (selling) part of the collateral at the current market price. The excess part of the asset will be returned to your account
How safe is the storage of my crypto assets?
They are securely stored in the Lendo Vault in cold storage, which means that they are not stored online. Also, the multi-signatory smart contract, which includes the borrower, protects the assets and prevents any web based fraud or theft.
What happens if my crypto assets significantly increase in value during the loan period?
In case of an increase of the market value of the pledged crypto asset (collateral) the borrower may do one of the following:
- Increase the loan amount (with the lenders agreement)
- Repay the loan, liquidating (selling) the part of the collateral at the current market price. The excess part of the asset will be returned to your account
What happens if I fail to repay the loan?
In cases where the borrower defaults on the loan, the same multi-signatory smart contract ensures that only the listed signatories can access the funds for repayment. This list includes the borrower and this signatory can only be over-ridden when a clearly defined default notice period has been exceeded.