The company plans to start issuing fiat personal loans to anybody who meets the relevant requirements including having a crypto balance.
Helio to Issue Fiat Money Loans on Crypto Collateral Security
Recently Helio announced that it would start offering short-term finance in fiat money to Australian customers. The company further stated that the cryptocurrency holders could put their crypto assets as collateral for the loans. Helio recently obtained an ASIC approved Australian credit license after buying another lending company.
Helio revealed that it will charge 24% interest rate on the loans with terms between 60 days and five years. The launch of the crypto-based lending platform came at a time the crypto markets plunged. Bitcoin prices hit a 15-month low exchanging for just $3387.10 as of the time of writing this article.
Although market conditions are discouraging many crypto startups and potential new entrants within the Crypto Space, Helio is unmoved. The company said it will take custody of customers’ crypto holding, in return for loans issued in up to four fiat currencies. The available currencies Helio listed include Australian dollars, USD, Euros and Hong Kong dollars.
According to Max Geraldes, Head of business development at Helio, the accepted cryptocurrency are limited to some assorted assets. The crypto assets would include Bitcoin, Ethereum, Litecoin, and Ripple. He further revealed that their license obtained from ASIC, the corporate regulator in Australia allows them to lend money. He revealed that Helio purchases Cashflow investment, the previous owner of the license it has.
Helio Crypto-Backing Loans Terms and Conditions
According to Max Geraldes, Helion would provide loans of repayment periods of up to 25 years. However, initials loan terms would be limited to a minimum of 60 days and a maximum of 5 years. He further explains that the company lends funds based on a maximum loan to Value (LVR) ratio of 50%.
The minimum loan amount the company offers is $1000 and the maximum loan amount is $5 million. With its 50% LVR policy, Helio would offer a loan of $5,000 to someone with a crypto holding of $10,000. The company further revealed that 50% is the maximum LVR. however, borrows who use lower LVR have their interest rates dropped to 20% for a 40% LVR and 17% for a 30% LVR. Borrowers who choose to use maximum LVR would be charged an interest rate of 24%.
Geraldes notices that their interest rate is much higher than what their competitors charges. However, he revealed that Helio’s product offering is competitive in that it doesn’t include any established fees or ongoing account fees. The standard interest rates on Australian credit cards range between 12.5% to 20%. On whether the company would liquidate their client in case cryptocurrency prices drop, Helio revealed that;
“We don’t want to liquidate any clients, but if crypto prices fall and the value of the underlying asset reaches 95% of the loan amount then we’ll have to liquidate,” Geraldes said.
The company further revealed that it would take ownership of customers crypto holding once a customer borrows money. Should you borrow a $5000 loan for a crypto collateral of $10,000 and bitcoin prices drop. It the price drop made your $10,000 bitcoin balance equal to $5,000 Helio would take over your entire balance.
Helio is in a partnership with Swiss company ETHlend as the custodian of its customer deposits. Ethlend also offers loans based backed by Digital assets holding of their customers. Helio slates to further partner with Ethlend in the Asia Pacific region to manage the crypto wallets and clearing liquidity. To get your loan approval at Helio, users undergo KYC checks and the creation of lending contracts.
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