checking your loan calculator, seems not right. If for example, I have to borrow 2k USD, you should have a collateral of 0.25167732BTC in your account. at a current rate of $9537/BTC as of this writing, you are requiring about $2400 worth of btc or about 120% of your loaned amount as a collateral??? considering that you are up to date with the market rates. why should I take a loan from your platform if I have that money with me? there is no advantage of taking a loan from you then. please explain.
Thank you for your interest! Regarding your question about the loan calculator, we should reassure you that it works totally right. Biterest provides Bitcoin users with bitcoin-backed loans where the borrower receives USD (fixed loans) against BTC instead of selling their crypto.
Regardless of the type of loan, the value of the asset pledged as collateral is traditionally greater than the amount the borrower is willing to receive. Moreover, Bitcoin is a highly volatile asset that’s why the collateral value can both rise and drop significantly over a relatively short period of time. At any period of time, therefore, the collateral value on Biterest has to be 10% greater than the used loan limit and the initial value is 20% more than the amount of the requested loan.
Compared to other crypto-backed lenders, Biterest requires the least collateral upfront for the same size loan. While other platforms require you to have the collateral which 50% more than the loan amount, your minimum collateral on Biterest has to be only 20% more. For example, if the loan amount is 2000 USD, then the initial collateral on your Biterest balance needs to be a minimum of 2400 USD.
Of course, it is up to the user how much collateral they would like to pledge. This depends on their willingness to hold bitcoin because the greater the collateral is, the lower will be the risk of automatic loan repayment by the collateral (Margin Call). Therefore Biterest lets you pledge collateral which can be 20%, 50%, or 70% more than used loan limit.
Also, last but not least, Biterest users can freely withdraw bitcoin which exceeds the required collateral amount when the BTC price increases and replenish the balance with more collateral when the BTC price decreases.