How to offer loans
Three types of loans are supported: on-site escrowed collateral loans, collateral loans without escrow, and no collateral loans. Loans are based in US dollars, but can be issued and repaid with different currencies.
Escrowed Collateral Loans
The least risky loan is where TrustedCoinTrades holds escrow and provides arbitration by the terms. To offer this type loan click the Lending tab and Post New Loan. After indicating you're offering a loan you'll be shown the terms page. Enter the amount loaned, interest, maximum number of payments and days between payments. The system will calculate the remaining values, such as total amount repaid, loan payment amount, loan duration, and repayment schedule.
As an example, say you're making a $100 loan at 5% interest to be repaid in 1 month (30 days). The amount to be repaid would be $105. You would set max payments to 1 and days between payments at 30 if you wanted the loan repaid in one lump sum 30 days after loan issue. If you wanted a weekly payment you would set days between payments at 7 and max payments at 4, which would make the loan duration 28 days, loan payment amount $26.25, and schedule a payment due starting at 7 day intervals after loan issuance.
Next, you would indicate repayment currency. A benefit of cryptocurrency is simple transfer of funds to anyone, so it may be desirable to use this as the transfer method. However, since loan issuance and payments are directly peer-to-peer transfer method can change any time during the course of the loan, as agreed within the Trade chat. The open question is what amount to use when sending a currency other than US dollars. To calculate this either member can click Calculator in the chat window and enter the desired payment amount and currency. This will post a system message for the correct amount. However, proof of payment would need to be posted within 20 minutes for the payment to be considered complete.
Next, you would indicate the amount of the loan the borrower needed escrow. As with trades, escrow is held in Bitcoin or Litecoin for a percentage of the USD value of the loan. Here you might use 110% to allow for rate volatility over the course of the loan. Should the loan go into default you could be awarded the escrow. Alternatively, you could indicate 'lender holds collateral' to show you would directly hold some form of collateral for security.
Last specify the terms of the loan. The most important thing here is to clearly state under what conditions you expect to be awarded escrow should the loan go into default. For example, you might state one late or missing payment would result in a warning, but the second would put the loan into default, and you should be awarded escrow upon default.
Escrowed funds are always awarded fully, never fractionally.
Collateral Loans Without Escrow
Please refer to Escrowed Collateral Loans, as the process is the same with the difference being TrustedCoinTrades doesn't hold escrow or arbitrate the loan. In this case you would indicate 'lender holds collateral' and specify what collateral you expected to be given under the terms.
No Collateral Loans
Please refer to Escrowed Collateral Loans, as the process is the same. However, in the escrow section you wouldn't indicate the borrower needed escrow any funds. Instead you could use other methods to secure the loan as indicated in the terms.