I own a handfull of domains, and i've bought/sold a couple in the past... The problem with taking a domain as collateral is that it's very hard to determine what the domainname is worth, and it's quite a hassle to push the domain to the creditor and back (after repayment). The fiat equivalent of the intrest is ~$10, i personally wouldn't want to go trough all the hassle to make $10.
The domain itself was registered 2 weeks ago, i doubt it's worth $35 (loan) + $10 (intrest) + $4.5 (10% of loan + intrest).
The last option the OP provides (buying a $10 domain for a creditor as a form of collateral) seems odd to me aswell... If the OP repays, and the creditor has to return the $10 collateral domain, wouldn't the OP be stuck with a domainname he hasn't picked? Also, a $10 domainname wouldn't be sufficient for a $35 loan (IMHO).
This logic doesn't work for really well-known domainnames offcourse. If the owner of blockchain.info was willing to give his domainname as collateral for a $10.000 loan, i'd personally take it
Regarding the buying of domain, he doesn't need to return me the domain. My $10 domain balance is not useful for me at all as I'm not interested in buying a new domain anymore
So With the interest of the Repayment, I will give the the new domain as well, it's fine with me
Regarding worth, I know it may not be worth that in your point however if you can give a "little less" it would also work
And apart from that, I can increase interest to 35%, My margin is higher but I need to make some money too
Hope you can understand
