Lendoit

It employs cryptocurrencies as a primary tool of credit financing. Bypassing the incumbent banks and credit market globalization enables borrowers and lenders to establish conditions that are favorable for both sides.

This is achievable thanks to a substantial difference in the interest rates observed throughout the world. For example, the average loan interest rate in Brazil can be up to 50%, while in Japan it’s as low as 1% per annum.

Another advantage of the proposed concept is that it offers full anonymity for all transactions made within the system. Blockchain and smart contracts ensure a workflow, which is based on the new generation ecosystem — Ethereum. It also plays the role of a primary cryptocurrency on the platform, although other cryptos are also available for loan making.

While Bitcoin offers an older generation blockchain that doesn’t support smart contracts and has highly volatile tokens, Ethereum perfectly meets the criteria set by this loan platform.

All lending operations are presented in the auction format. A borrower posts the info regarding the loan they want to procure, while lenders partake in competitive bidding offering to fund either a whole sum or its fraction at a specific interest rate. Based on the outcome of the auction, the system will automatically choose an optimal loan structure for the borrower.

A selling point of this system is the payback guarantee and availability of the repayment funds in case the debt isn’t paid off. To avoid a risk of this kind, a number of instruments were developed. First, before placing a loan request, every applicant has to go through a verification procedure, credit history analysis, and so on. Based on this data, they’ll receive a trust score.

To make it happen, some third-party services are automatically employed to assess a borrower’s creditworthiness. Automatic services of this kind allow to reduce a lengthy assessment procedure to a few hours or even minutes. At the same time all available data sources are used to reach a verdict, including social media outlets of an applicant.

Second, every user’s loan history is thoroughly analyzed to estimate their credit ratings. Third, unpaid debts can be bought by an accredited debt collection agency in the auction format. And finally, the platform has its own reserve fund for covering unpaid debts. It’s amassed and replenished through a special smart contract, which tolls every successful transaction with a small commission.