Bitcoin Loans vs. Traditional Loans: Which Is Better?

[Suba]

Even if you're not short of money and have never taken out a loan, discussing loans is still part of financial management, which is why I need to address this topic.

Bitcoin loans and traditional loans have different characteristics. Traditional loans often involve banks and non-bank financial institutions, which often lead to negative credit scores, while Bitcoin loans don't require a credit score. Suppose I take out a Bitcoin loan worth 1 BTC at the current price of $87,000, with an average monthly interest rate of around 0.04% plus any administrative fees. Uniquely, Bitcoin loans must also be repaid in Bitcoin. So, if the BTC price drops to $70k next month, I will profit from the difference between the loan and the loan.

 

[Kera]

With Bitcoin loans, there is no need for checks of credit history when applying for the loans. That's it's advantage over traditional loans.

 

[Nomad]

I have never taken Bitcoin loan, instead of taking bitcoin loan I use my existing bitcoin as collateral and get USDT loan, it is easier to pay USDT.

 

[Stardom22]

For me l think that the normal loans are better of compared to the crypto based loans. That is because most crypto loans would fluctuate in prices as the crypto prices changes for sure.

 

[eLdavis]

Personally i see loan as loan, irrespective of the type of loan. So i try my best to avoid it completely at all cost.

 

[Stardom22]

A loan is a loan because it crypto or traditional based one. All of these are debts and people should really avoid it because loan are very addictive for sure.

 

[Fire&Rain]

Bitcoin loans are interesting because they don’t rely on credit scores and let you borrow using crypto as collateral. Borrowing 1 BTC at today’s price gives flexibility, and if BTC drops, repaying in cheaper coins can create a profit. Unlike traditional loans, there’s less bureaucracy, but you need to watch volatility closely since crypto prices swing fast.