Borrowing
Qualifying for a loan in the first place is uncertain, usually requiring a high enough credit score and good debt-to-income ratio. Once approved, on average you can expect to pay 10%-30% in interest.
DeFi let’s you collateralize your crypto holdings in order to pull a loan against it.
For example, if you are holding $1,000 of bitcoin, a DeFi platform will let you pull out a loan on anywhere from 25%-75% of that balance. And this is all permissionless, meaning that no background check is required. What’s more, interest rate payments on DeFi loans range from only 1%-8%.
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