The culture and business of borrowing and lending have been going on in the world for millennia. However, in the past decade, the practice of loaning has taken shape in blockchains. The rising number of cryptocurrency lending applications are pushing more individuals towards crypto lending and borrowing to increase their coffers. Banks have long been the prime source of lending and borrowing to the public but that may be changing with the development of multitudes of peer to peer lending applications across the world. Whether through fiat or digital assets, person to person (P2P) lending is slowly pushing bank based/financial institutional based lending away.


Peer to Peer Lending vs Bank based Lending

The development in the world today is moving fast in terms of technology, social interactions and other areas of the economy. However, there remain some areas that have lagged behind these rapid developments. One of the key areas still dealing in medieval processes is loan processing in banks.

hands reaching out to money pouring from the sky

As a borrower, banks require a number of documents such as a good credit score, previous bank statements, verification and some form of collateral to receive the loan. Even after producing all these forms of documentation, borrowers still need to wait for 30-45 days to receive the money in their accounts (minus heavy processing fees). Notwithstanding, lenders also suffer through banking systems. The interest rates offered to lend are low in a period we are experiencing very low rates and negative interest rates across the globe.

Banks have acted as an intermediary facilitating loans through the years but with such crucial problems facing the industry, is it time to take up peer to peer lending?

How does Peer to Peer lending (P2P) work?

There are a number of startups and companies that have taken up P2P lending. While each has its set of rules and regulations to follow most of them follow the process outlined below.

The use of blockchain technology allows borrowers and lenders to exchange funds without the need of an intermediary. Users crowdsource funds from a number of people with the agreement recorded on a smart contract. Once the conditions to execute the contract are fulfilled, borrowers are able to receive the funds in 2 hours to 7 days pending verification with extremely low transaction fees.

How to get a loan through P2P blockchain lending

To get a loan, users collateralize their digital assets on the lending platform.

  • Open an account with a cryptocurrency lending application and complete the verification process. You are required to provide the necessary KYC/AML identification, income verification, and some personal references.
  • Once verified, login to your account and select your favorite type of loan. The options vary with time limits, lending rates and the amount required. It is important to look for the best lender to avoid paying extreme interest rates on the loan.
  • Wait for approval on the loan and check for the money in your PayPal account in a few hours. The lending and borrowing service is available for anyone with an internet connection across the world.
  • Start repaying your loans according to the timeline agreed with the lender.

Here are TWO of the best peer to peer cryptocurrency and digital assets lending applications in the world today.


SALT Lending

SALT: Secure Automated Lending Technology official website page

SALT (Secure Automated Lending Technology) lending is one of the largest blockchain based lenders today. The decentralized lending platform allows users to borrow money from a large network of people using digital assets as collateral. The platform will require the necessary AML/KYC verification procedures to lend you money. However, unlike previous attempts to peer-to-peer lending, the platform has a fast approval system to release your loan as fast as possible.

The company stores the collateral digital assets in a secure and fully audited wallet to prevent hacks or cheating in the loan process. The interest is set by the blockchain provider who keeps the assets safe till the loan is repaid by the borrower.



ETHLend official website

ETHLend is a digital asset lender that deals exclusively with Ethereum based cryptocurrencies. The market free approach adopted by the company has been a revelation in digital assets lending. The platform allows borrowers and lenders across the world to set their own interest rates and time limits. Not only does the platform offer a new market-based lending structure but also allows a user without bank accounts and financial institutions to access loans easily. To borrow or lend users require an ETH wallet only.

The developments on ETHLend are expected to open up the loaning space as they improve on-demand lending, crowd lending, and decentralized credit scoring.


Advantages of Blockchain P2P loans

  1. They are faster than conventional methods of getting a loan. The time reduction in verification and processing of the loan from 30 days+ to less than a week is exceptional.
  2. The peer to peer loans offer better rates than traditional loans.
  3. Some of the P2P lending platforms offer a market for loans where borrowers and lenders negotiate the interest rates and timespan for repayments. This offers better flexibility on the part of the borrower to repay the loan.

Disadvantages of P2P blockchain loans

  1. The young nature of the cryptocurrency industry limits the market for peer to peer lending through digital assets.
  2. The volatile nature of cryptocurrencies is a barrier to entry to the field of peer to peer lending.


While the industry still fights to topple the traditional loaning system, a lot will need to be done to promote the adoption of digital assets. Loans being cheaper and the short time of verification has played a big role in pushing more investors into taking up a smart contract based P2P loans.

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