In the ever-developing world of technology, cryptocurrency is taking the center stage and slowly overtaking fiat currency. Due to its decentralized nature, the creation of personal wealth is unrestricted. Although it is not regulated by a centralized authority, it is still a safe currency to use.
USDT or Tether is a type of cryptocurrency that is stable due to it being equivalent to one U.S. dollar. Just like with traditional lending, one can invest in USDT by lending the cryptocurrency and also borrowing on the same platform. It is called a USDT loan or a Tether loan.
How USDT Loans Work
The USDT lending platforms act as a third party connecting the lender and borrower. The platform allows one to lend and borrow a Tether loan at specific interest rates. Many investors would rather HODL or lend USDT and other cryptocurrencies until they get a favorable price to trade.
On one side, the platforms allow the investors to lend their assets for interest. On the other, the borrowers are allowed to get a USDT loan as per the loan-to-value ratio for a given duration. The digital assets can be used as collateral to guarantee the loans while at the same time earning dividends.
How to Get Started with a USDT Loan
The following are the steps to take when requesting a USDT loan.
- Find a USDT loan platform of your choice.
- Register and deposit Tether.
- Request a loan on the platform.
- If the Tether loan is approved, you will be required to provide collateral, which in this case is crypto assets. The crypto assets will be held by the lender until the loan is repaid in full.
- Then, the lender finances the Tether loan.
Choosing a USDT Loan Platform
When choosing a USDT loan platform to borrow from, the following points should be considered.
- Interest rate – Find a platform with a favorable rate that is easy to afford to pay back to ensure you do not fail to repay the Tether loan according to the terms and end up losing your crypto investment.
- Fees – Each platform charges fees involved in the process. An example is currency conversion fees for fiat currency. These fees may differ from one platform to the next, and you may choose one that is cost-friendly.
- Collateral – This is the security given to ensure you pay back your USDT loan. These are the crypto assets you must provide before a loan is approved. The loan to value ratio gives you a rough idea of what collateral you will need.
Popular USDT Loan Platforms to Try
The following are some of the USDT loan platforms you can consider.
- YouHodler – With an LTV ratio of up to 90% and low interest rates for borrowers, this is one of the best platforms to consider. Your Tether will be used as collateral while it is earning APY at the same time.
- BlockFi – This platform also offers a competitively low interest rate and a high LTV ratio for borrowers. Similarly, your HODLed USDT will continue to earn a high interest rate while being used as collateral as well.
- Hodlnaut – You will definitely love this platform as it is similar to BlockFi and YouHodler in many ways. You will receive a high LTV ratio for a USDT loan and low interest rates while saved Tether continues to earn interest.
These insights are invaluable whether you are a newbie or experienced in crypto lending and HODLing. Now that you have read through them, it is time to make the right decisions on how to grow your crypto.