Uquid - Buy now Pay Later with crypto collateral
Introduction
Many fintech platforms are adding Buy now Oay Later as a trending product to their business. With the popularity of online shopping platforms, the need for customers to get what they want even when their money runs short becomes important. And empowering buyers to access goods or services with zero down payments is what may fintech platforms are exploring. That is where Uquid comes into play - although with a unique twist.
Uquid goes the extra mile beyond just offering buyers an opportunity to take out shopping loans. It allows the use of crypto as a basis to offer such loans. This services thus aims at reaching out to the global crypto market and its users for its loan service. In this article, we will take a look at how Uquid offers its Buy Now Pay Later service.
About Uquid Pay in 3
The name of the platform is Uquid. But the name of their Buy Now Pay later service is Uquid Pay in 3. The name is borrowed from the nature of their BNPL service. Users take out shopping loans and have a 3 months period to gradually pay up the loan. I month from the date of taking the loan and making a purchase, the user is expected to make the first repayment of the loan. After wards, they continue to return the remaining part of the loan at each successive next months due from the purchase date.
A lot of things make Uquid Pay in 3 very attractive and unique. Many BNPL service often charge a fee to enroll or apply for the loan. But for this particular BNPL from Uquid, there is no registration fees or any background checks on credit history. Every user that applies for the loan will likely get it without any need to pay fees. That is just one interesting aspect of Uquid.
Another unique thing about Uquid is that the loans do not come with interest. Many other services in the BNPL industry make their money from interests charged on the loan. Some can attract interests as high as 36% of the capital borrowed. Uquid on the other hand does not add any fees to the amount borrowed. If the person obtaining the loan repays as at when due, they are not expected to add any extra money to the loan.
Some users though default loans of this nature and there should be a way to check that. So Uquid introduces penalties for defaulting in payment in time. If a user does not repay the installments, an interest relative to the amount invested would be placed as a penalty on the loan. This was designed to ensure that anyone taking the loan would be prepared to honor the terms of the loan - making sure they repay in time.
Crypto Collateral
One other thing that makes Uquid both unique and maybe challenging is that users wanting to borrow money must produce a collateral. The collateral must be in form of crypto. Right now, the platform accepts BTC as a form of collateral against any loans obtained. As a security, the BTC deposited would ensure that the loans are repaid. If the user fails to repay after some considerable time elapses beyond the loan term, the security would be used to settle the loan.
There is another coin that could be used to provide the collaterial. Uquid has a native crytocurrency for its platform called Uquid Coin (UQC). If a user does not have BTC to be used as collateral, they could buy the UQC token and use it in place of the BTC. Uquid promises to include other cryptocurrencies to be used as a security for the loans. Unfortunately, providing the crypto collateral is a condition for obtaining the loan. Users that do not comply will not be able to obtain the loan.
The crypto collateral is locked away as long as the loan has not been fully repaid by the borrower. Once the loan is completely paid for, the platform automatically releases the crypto collateral to the user.
No one can predict the price of BTC or any other crypto. Hence, it is possible that the value goes down within the period the loan is still active. Users on the platform have asked about this and below is what Uquid has to say about it:
What should I do if my crypto collateral drops in value?
When the collateral falls to a dangerous level (usually CTV below 65%). You have the right to add more assets in the "Account" "Payin3" section to reduce the risk level. source
A lot of many other questions are answered in the Frequently Asked Questions page of Uquid. You might wish to check that out.
Finally
If you are a regular shopper and might consider taking on shopping loans, there are many options out there. Uquid is certainly a unique solution for crypto users. Remember to check their terms of service before applying to collect the loan. Always research and learn more about this service before investing in it.
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Uquid - Buy now Pay Later with crypto collateral
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