xCoins is a unique brand that connects bitcoins lenders and borrowers. Developed as a bitcoin seller, the brand forayed into bitcoin lending, taking on competitors like BTC Pop, Poloniex, BitLending Club, and Bit Bond. The xCoins system is intuitive and fast. Lenders have the freedom to choose interest rates to ensure the best market rate based on demand and supply.

Unlike many other platforms, communication between the lender and the borrower is almost nil but can be arranged through customer support. A number of well-placed checks-and-balances ensure the best interests of everyone involved. However, the process is not risk-free and lenders do have some concerns while lending on xCoins. This xCoins review present first-hand experience of both lending and borrowing on the exchange. Read on.

Borrowing Bitcoins on xCoins

xCoins offers secured bitcoins loans to all registered users. For borrowing bitcoins, you need to register with the platform and get your KYC verified. KYC verification is simple and users only need to share their photo ID proof to get started. This will ensure faster transactions later. After your registration, simply select the number of bitcoins you wish to buy and xCoins will show you the list of best possible rates.

Once you confirm the purchase, you need to make a security deposit directly into the PayPal account of the lender. Users don’t need a PayPal account and they can pay through gateways approved by PayPal. Borrowers can also use their debit/credit card and ACH (bank transfer) to pay the lender. Make sure to add your bank details under Payment Processors to configure the ACH payment process. Apart from the security deposit, Lenders will have to pay the lenders fees, loan originating fees, mining charges, and PayPal processing fees.

Once the transfer of funds is completed, you will receive your bitcoins immediately on your wallet. You don’t need to worry about not getting your bitcoins because lenders deposit their bitcoins in an escrow wallet with xCoins. In some cases, the security deposit covers 100% of the bitcoin lending value and the interest rate is almost zero. Such a “borrowing” is actually buying the bitcoins permanently.

You can take full possession of bitcoins by contacting with the lender through the xCoins customer support. Many lenders sell their bitcoins through this route as it’s fast and secure.
The biggest advantage of borrowing bitcoins on xCoins is its speed. Unlike bitcoin exchanges, where it takes hours for a single transaction, xCoins just asks for 5 minutes. This is a paradigm shift in transactions time and

Lending Bitcoins on xCoins

The lending side of xCoins is a bit lengthy and it is where most of the risk lies in the form of non-repayment of loan and PayPal/Credit Card chargebacks. However, with self-set interest rates, you have the potential to earn money instantly on your idle bitcoins. For lending bitcoins on xCoins, lenders have to register with the platform with their mobile number, email id, bitcoin wallet address, and a verified PayPal account.

Once registered, you will be asked for the number of bitcoins you wish to lend out in USD. There is a minimum limit of $20 worth of bitcoins for lenders. Next, you have to transfer the number of bitcoins you wish to lend to a secured xCoins wallet as an escrow.

You will then be asked to set the security deposit amount and the interest rate on your bitcoin loan. You can split your total number of bitcoins on your xCoins wallet into different loan quantities and corresponding interest rates. xCoins will show you the average and the lowest interest rate available on the platform for you to set the best rate.

Next, you simply have to wait until you get a buyer. Once a buyer selects your offer, your PayPal account will directly be credited with the security deposit by the borrower, along with PayPal charges, mining fees, and xCoins commissions. As a lender, you don’t have to pay a dime to use the xCoins services. However, there are some unavoidable ambiguity and risk in the bitcoin lending process.

There is no guarantee of repayment and the security amount is the final collateral for every bitcoin loan. If the price of bitcoin fluctuates drastically, it can have an impact on this “secured loan” process. Secondly, the risk of a chargeback by the borrower cannot be mitigated. Since PayPal is very serious about chargebacks, this can be a risk to your PayPal account. The onus falls on the lender to prove the actual transactions. xCoins is a well-established brand and we believe that lender facing chargeback issues on xCoins will get full support on PayPal chargeback disputes.

Common Questions and Answers on xCoins Bitcoin Lending

What is the interest rate on bitcoin loans on xCoins?

xCoins lets the lenders decide the lending rate for bitcoins. Usually, this varies between 10-20% upfront payment. The interest rate doesn’t depend on the loan term and is a one-time payment above and beyond the security deposit.

What are the extra fees for lending bitcoins on xCoins?

Apart from the interest fees and security deposit, borrowers have to pay a 5% loan originating fees (xCoins commission), a small mining fees, and payment process fees/ACH fees/PayPal fees. On average, lenders need to pay 10% of the total transaction costs like commissions and charges. The interest component may vary between 10-20%. Essentially, for a $100 bitcoin loan, you need to pay around $125-130, with the added benefit of returning the bitcoin/s against the security deposit. In that case, borrowers will be charged for the return payment processing fees.

What happens if borrowers don’t repay the bitcoin loan?

The security deposit matches the bitcoin lending value in most cases, creating an incentive for the borrower to return the bitcoins. However, in bitcoin bull markets, when the price of the bitcoins may soar, it is natural for the borrower to forgo his security deposit and cancel the loan. In such cases, the lenders get to keep the security deposit.

What happens if the price of bitcoins changes during the loan term?

The value of bitcoins and the security deposit is set in terms of the dollar. Borrowers only need to repay the USD-equivalent of bitcoins to the lender. This means that if a borrower lends $100 worth of bitcoins, he needs to pay back $100 worth of bitcoins in the future even if the value of the original bitcoins’ changes. This is a market-built risk that is every participant follows in any bitcoin-lending system.

How do borrowers repay the loan?

For repaying the bitcoin loan, the borrowers need to directly contact the lender and arrange for the repayment. Borrowers need to request xCoins for the contact details of the lender. Once an agreement for the price is set, borrowers will have to transfer the USD-equivalent of bitcoins back to the wallet and the lender will send the borrower the security deposits. xCoins only provide the escrow bitcoin wallet and the lender is solely liable for payments. Once the lender sends back the security money, he can present the payment receipt to xCoins to get back his USD-equivalent bitcoins.

Conclusion

xCoins needs to be applauded for simplifying a mammoth process down to a few steps. It follows minimalism to the core and gives its users full freedom in decision-making. The process is intuitive and works faster than most other bitcoin exchanges. xCoins is honest about what it offers and what it doesn’t.

There are some inherent risks involved in bitcoin lending that xCoins can’t fix like chargebacks and non-repayment. Most transactions on the network are buying/selling bitcoins at the current price, disguised as a bitcoin loan. The added advantage is that you can go back to the system and sell back your bitcoins for your security deposit.

There are some drawbacks but nothing on the trust issue. xCoins is a trusted brand that has overseen millions of transactions since its inception. There are very few complaints on the web against xCoins and most users seem to work well within the lending system.

There is a lack of social interaction between borrowers and lenders that are currently being offered by other bitcoin-lending brands. We recommend xCoins to people who need bitcoins within an hour or someone who wants the assurance of selling back the bitcoins in the future. For everyone else buying bitcoins, xCoins can be a bit expensive and we recommend other bitcoin exchanges where the rates are way lower than xCoins.