Here's Why You No Longer Need to Sell Your Bitcoin During Emergencies

The first time I bought Bitcoin was in 2020. I was still a newbie and I heard that buying Bitcoin during the dip was the best time to invest. So I did. Unfortunately, my time as a bitcoin owner was cut short, as I had to sell my bitcoin a few months after to pay an unexpected bill.?

If I had Nobcredit then, who knows what my Bitcoin would have amounted to by now? Lucky for you, you don’t have to wonder if you find yourself in a similar position. With Nobcredit, you can take a loan using your Bitcoin as collateral. This way, you wouldn’t need to sell your Bitcoin even during emergencies. I’ll show you how it works.

What is Nobcredit?

Nobcredit is Bitnob loans feature that allows you to get an instant cash loan for up to 12 months using your Bitcoin as collateral. In order to qualify for a loan, you’ll need to have at least $100 worth of BTC in your wallet. Once you have that covered, you can now take a loan.

How much can you borrow with Nobcredit?

You can borrow as much as $2500 with Nobcredit. However, there are conditions attached to taking a loan on Nobcredit and we’ll walk you through these.?

The first condition is that you can only borrow using at most 50% of the amount of BTC you have in your wallet as collateral. Also, you can only take out a $2500 loan at a time, regardless of how much worth of BTC you have in your wallet.

The lower your loan-to-value ratio is, the lesser the risk attached to it. For example, if you take a loan of $500 with $2000 worth of BTC as collateral, it would be less of a risk than if you took a loan of $1000?with the same $2000 worth of BTC as collateral. This is because with a higher Loan to Value ratio, you risk a Margin call.?

What is a Margin call?

Bitcoin has periodic dips where the value falls for a while. If this happens during the period of your loan, the value of your collateral drops as well.?You get a Margin call when the value of your collateral falls below a certain figure. When this happens, you need to add some more BTC as collateral. Liquidity occurs when the value of bitcoin falls below a threshold (lower than the margin call) and you are yet to respond to the margin call. Liquidity simply means that a portion of your collateral will be dissolved to make up for the margin call.

Now that you know how much you can borrow with Nobcredit, how do you take a loan?

How to take out a loan with Nobcredit

Taking a loan with Nobcredit is pretty easy and you can do this in a few steps. It would only take a few minutes to complete. We’ll walk you through the process.

Step 1:?Log into your Bitnob app and go to Actions. Then select “Take A Loan”

Step 2:?Click on “Apply For A Loan”.

Step 3: Name your loan, preferably with the purpose it serves. Then click on Next.

Step 4:?Enter the amount you would like to borrow. Based on the amount of BTC you have, you have a fixed loan window that you cannot exceed. If you have $500 worth of BTC, you can only borrow between $10 and $239.

Step 5:?Choose your preferred Loan to Value ratio. It could be between 10% to 50%. Remember, the higher your Loan to Value ratio, the lesser the risk.?

Step 6:?Choose your repayment plan. Whichever plan you choose, the total interest is automatically calculated for you.

Step 7:?Choose your repayment period. It could be 3 months, 6 months, 9 months, or 12 months. The shorter your repayment period, the smaller the interest paid. Remember, the total interest is calculated automatically for you, so you can see how much you would need to pay upfront.

Step 8:?Review the details of your loan, including the terms for Margin Call and Liquidity.?

Step 9:?After reviewing the terms of your loan, agree to these terms by clicking the box. Then click on Request Loan, and you’re set. It takes about 24-48 hours to get feedback on your request. All that’s left to do is wait!

What is the Loan Calculator used for?

The loan calculator helps you determine the details of your loan before you begin the process of applying for one. You input the amount you want to borrow, the repayment period, your Loan to Value ratio, and the repayment plan. Then based on these details,?it automatically generates the total interest, how much you need to pay monthly, and also how much BTC you will need as collateral. That way, you can fully understand the commitment before you even begin the process of applying for a loan.

Why should you use Nobcredit?

As a Bitcoiner, persevering on your journey is just as important as starting the journey. However, it is really difficult to persevere and ‘hold’ when life keeps coming at you. Bills can come unexpectedly, and they are unavoidable. In situations like these, Nobcredit helps you protect your investment while still sorting out expenses. The interest rates are super low, and won’t have you struggling to pay. And it is a very thoughtful and convenient option.

Will you make a choice to HODL?

With Nobcredit, your BTC is safe, if you take out a loan when BTC is at a certain price, and it moons during the period of the loan, your BTC appreciates in value, and you get to benefit from that because you didn’t sell. With Nobcredit, you hold all the power, pun intended. Ultimately, the choice is yours.