Interested in applying for a Loan proposal, (Going with suchmoon's suggestion)

magneto

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Quote from: CryptopreneurBrainboss on October 06, 2019, 02:12:59 PM

Purpose for loan: Investment in digitex altcoin
Duration: maximum 5 months (time starts when loan get filled).
Loan Amount: $1200 (everything will be calculated in USD)
Monthly % interest: 5%

Some important notice: A trusted escrows would be used for this transaction (haven't discussed with anyone yet but probably DarkStar_ service will be employed if he'll be willing to partake in this transaction or we agreed on someone else who's trustworthy).

The filled loan would be sent to the escrow, he buys the token (estimated amount 30,000+ DGTX) and hold the coins until I repay loan amount plus estimated interest based on monthly calculation. After confirmation of full payment, I get access to my coins. Irrespective of when I decide to pay the monthly interested, be it at the 1st or 31st day of the month, I pay the 5% monthly interest.

Note: At any point in time I can direct the escrow to sell the token to pay the lender and cashout my profits but the lender can't access coin unless a default scenario occurs. This is a non collateral loan.

Haven't decided yet but do you think anyone would be interested in offering me this loan?

What would be the difference for the lender compared to just buying the tokens himself?

It makes no sense, because if you do default, and the altcoin value goes down drastically, then the lender is exposed to the same exchange rate risks that he would have been exposed if he just bought these tokens off of the spot market.

The lender is not able to even recoup the loan if tokens drop below 100% of loan value. Unless you provide at least a bit of collateral, like even 30% of loan amount as a buffer, I doubt anyone would be willing to help you here.

SM23031997

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Quote from: suchmoon on October 06, 2019, 02:55:07 PM

Quote from: SM23031997 on October 06, 2019, 02:44:20 PM

Quote from: suchmoon on October 06, 2019, 02:39:34 PM

And while you're saying "non collateral", it is essentially a collateral since the escrow is holding the coins.

Really? He is not putting a dime on risk. It is collateral-free as well as a risk-free scenario for the borrower.

He's not getting the money into his pocket either, so not quite like that.

There is a couple of issues, or really one issue - the value of the collateral. It's not sufficient during the first month at least, and in addition to the "default scenario" the lender should be able to sell it if the value drops below a certain percentage of the loan balance.

The lender will always be in loss if the borrower decides to default on this loan.
The conditions of this loan are like you are letting someone gamble with your money where he will keep the profits and you will bear the loss if any.
Enough discussion on the topic. All in all, the terms are not worth lending.

DireWolfM14

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Quote from: CryptopreneurBrainboss on October 06, 2019, 04:26:53 PM

Quote from: DireWolfM14 on October 06, 2019, 03:10:21 PM

Too many draw-backs and not enough assurances for my liking.

So lets say, you were willing to fullfil this loan, what are the adjustment you would add to make it suitable?

I've given you a non-collateralized loan for about $500 (I think) worth of ETH in the past. If it was a BTC or ETH loan for about that amount, or even slightly more I wouldn't hesitate. But I would want the same currency as repayment, and 5% for what is essentially a non-collateralized loan is a bit low.

I've thought about adding $1,000 worth of stable-coin to my loan offerings, but I don't know which one I want. Maybe DAI in the future, but again it's not something I'm doing now and I don't think it's a popular enough coin at this point to make an impact. I am certain that converting my BTC (or even ETH) to USD value for a loan isn't something I would consider beneficial.

CryptopreneurBrainboss

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Quote from: DireWolfM14 on October 06, 2019, 03:10:21 PM

Too many draw-backs and not enough assurances for my liking.

So lets say, you were willing to fullfil this loan, what are the adjustment you would add to make it suitable?

Quote from: suchmoon on October 06, 2019, 02:39:34 PM

Wouldn't it be better to just buy $240 worth of DGTX every month? I have no idea what that is but with the whole market heading south it must be very special for you to risk buying it AND pay interest on top of it.

Have been following the development of the project for like a year plus and due to some recent development, just decided it's time to put in more fund. Haven't invested this much on any altcoin so this is kinda like my first time going big. Initially your suggestion was my first decision then thought about the loan thingy.

Quote from: LoyceV on October 06, 2019, 03:09:01 PM

I've seen people default on lower amounts, and you're asking for more than the GDP per capita in 5 months.

I have done some thinking, concerning my salary and other side hustle. The $1200 was divided into 5 months meaning I should be able to keep aside $300 monthly to meet the total loan+interest payment. The loan though was still under considerations so haven't made a final decision although thanks (everyone) for the inputs.

DireWolfM14

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Just to offer my opinion; I wouldn't accept this loan with your conditions.

1) Assume the lender doesn't have USD to loan, so he would have to convert BTC (for the purpose of this loan) into USD. I'm usually bullish on BTC, so that a no starter.
2) If the lender was bullish on the altcoin you want to purchase, why wouldn't he just purchase it himself?
3) If the lender is bullish on BTC, the likelihood of it going up 25% (5% for 5 months) is actually very good. All it would have to do is return to $10k, so there's really no advantage for the lender.
4) Bitcoin could spike to well above $10k in a heartbeat, leaving the lender at a loss.
5) Your intention to use the BTC to buy an altcoin effectively makes that altcoin the collateral, introducing the risks associated with that altcoin.

Too many draw-backs and not enough assurances for my liking.

LoyceV

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My thoughts: don't do it! In general, you shouldn't invest money you can't afford to lose, and investing money you don't even have is worse than that. Any altcoin can drop 90% in that time.

I've seen people default on lower amounts, and you're asking for more than the GDP per capita in 5 months.

suchmoon

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Quote from: SM23031997 on October 06, 2019, 02:44:20 PM

Quote from: suchmoon on October 06, 2019, 02:39:34 PM

And while you're saying "non collateral", it is essentially a collateral since the escrow is holding the coins.

Really? He is not putting a dime on risk. It is collateral-free as well as a risk-free scenario for the borrower.

He's not getting the money into his pocket either, so not quite like that.

There is a couple of issues, or really one issue - the value of the collateral. It's not sufficient during the first month at least, and in addition to the "default scenario" the lender should be able to sell it if the value drops below a certain percentage of the loan balance.

SM23031997

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Quote from: suchmoon on October 06, 2019, 02:39:34 PM

And while you're saying "non collateral", it is essentially a collateral since the escrow is holding the coins.

Really? He is not putting a dime on risk. It is collateral-free as well as a risk-free scenario for the borrower.

suchmoon

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Wouldn't it be better to just buy $240 worth of DGTX every month? I have no idea what that is but with the whole market heading south it must be very special for you to risk buying it AND pay interest on top of it.

And while you're saying "non collateral", it is essentially a collateral since the escrow is holding the coins except it's too small (typically 120% would be needed). Not a good offer I'm afraid.

SM23031997

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Looks like a Win-Win condition for you.
Consider yourself as a lender and me as a borrower with the above conditions.
Tell me, will you fill that kind of loan?

CryptopreneurBrainboss

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Purpose for loan: Investment in digitex altcoin
Duration: maximum 5 months (time starts when loan get filled).
Loan Amount: $1200 (everything will be calculated in USD)
Monthly % interest: 5%

Some important notice: A trusted escrows would be used for this transaction (haven't discussed with anyone yet but probably DarkStar_ service will be employed if he'll be willing to partake in this transaction or we agreed on someone else who's trustworthy).

The filled loan would be sent to the escrow, he buys the token (estimated amount 30,000+ DGTX) and hold the coins until I repay loan amount plus estimated interest based on monthly calculation. After confirmation of full payment, I get access to my coins. Irrespective of when I decide to pay the monthly interested, be it at the 1st or 31st day of the month, I pay the 5% monthly interest.

Note: At any point in time I can direct the escrow to sell the token to pay the lender and cashout my profits but the lender can't access coin unless a default scenario occurs. This is a non collateral loan.

Haven't decided yet but do you think anyone would be interested in offering me this loan?

Topic: Interested in applying for a Loan proposal, (Going with suchmoon's suggestion) (Read 201 times)