As interest rates across the world plunge to record lows, some even in the negative territory, savers are left with insignificant or no returns on their bank deposits. Other investment classes such as stocks and real estate are already kissing stratospheric levels, which makes them more risky comparative to the returns intended.

But, savers need not lose heart, for there is another way to earn great returns, and yes, it is completely legal.

The digital currency Bitcoin can also be borrowed and lent as loans at rather attractive rates, both for borrowers and lenders.

For Borrowers

The complete process of applying for a Bitcoin loan is pretty simple.

Just like in a bank, where to apply for a loan, an account is needed, similarly, while applying for a Bitcoin loan, the borrower has to set up an online account at a website which facilitates Bitcoin loans. Users will then be asked to verify their details before proceeding to the next step.

The next step requires the borrowers to enter the amount of loan, the time period of the loan, and the interest rate which he is willing to pay on the loan. If there is a lender who is ready to lend at the suggested terms and conditions, the loan process is completed.

It goes without saying that those seeking loans should maintain the highest level of integrity and make timely interest payments, in order to keep the account in good standing. Having a good online repayment history also helps in securing more loans.

For Lenders

Holders of Bitcoin who are ready to share their Bitcoins for some extra profit can consider lending to the loan seekers.

A great aspect of lending is that the high volatility risk has been eliminated. Bitcoin and other cryptocurrencies, including Litecoin and Dogecoin, are high-risk currencies, and investors with a low-risk appetite may find lending a great way to earn returns.

But, it must not be forgotten that the borrower might miss out on payments or never pay back. One way to mitigate this risk is by lending only a small number of Bitcoins and doing a background check on the borrower.

Bitcoin Loan Websites

Commercial financing backed by Bitcoin and other altcoins has gained a lot of traction in recent times, with websites providing such services mushrooming in conjunction with the expanding Bitcoin ecosystem.

Some of the prominent Bitcoin loan websites are:

BTCjam and BitLendingClub provide updated information on the loan listings, which includes amount, interest rate, percentage of amount funded, the remaining time period, expected annual percentage return (APR), ratings (or reputation), and others.

Bitbond is another well-renowned name in the Bitcoin loans industry and has catered to over 500 loans with parties from over 120 countries.

A non-commercial player, Kiva also assists in Bitcoin financing to underprivileged communities to help them with the purchase of equipments, higher education, and other basic needs.

For those who are looking to loan or borrow Bitcoins, the above sites could prove to be immensely helpful.

Source : http://www.newsbtc.com/2015/03/19/a-simple-guide-to-bitcoin-loans/

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