Nexo.io Review 2019 – Cryptocurrency Backed Loans
- Fast Registration Process
- High Interest Savings Accounts
- Excellent Customer Service
- Excellent Security
- Service available worldwide
- Possible margin calls
- High yearly interest rates when NEXO tokens are not in play
Nexo: Crypto-Backed Loan in Minutes
Nexo is currently the world’s largest crypto lender with over ten years of experience in FinTech. The company has its origins in 2007, where four entrepreneurs realized how inefficient was the current lending system. A breakthrough happened in 2016, when the company adopted machine learning and big data technologies, integrating Bitcoin as a loan repayment option. Since there, this fully licensed and regulated financial institution received many awards, like “Innovation of the year” in 2016 or Forbes Business Award – “Financial Sector Innovation”.
Services Offered by Nexo
Nexo is a London based company, that aims to provide instant loans for millions of people across Europe, by applying modern blockchain technology. Besides lending, the company enables you to also earn interest on your 100% asset-backed USD, EUR, GBP, and stablecoins – up to 8% annually. All of that can be done by a solid app or Nexo bank card, with access to your credit line worldwide. Services offered by this company are genuinely all-rounded, accessible, and within reach of your hands.
Instant Crypto Credit Line
The most crucial product offered by Nexo is an Instant Credit Line that enables you to use your funds without losing the upside potential. Only a few minute registration process separates you from receiving a credit line on your bitcoin, ether, Nexo token, XRP, BNB, LTC, and XLM.
No credit checks, no hidden fees, flexibility, and guaranteed approval. It almost sounds too good to be true, but it is. What is more, listed above tokens are only a part of the final product, as the company plans to add over ten more, such as Tron, Dash, EOS, NEO, or even privacy coins like Monero.
Earn Interest on Your Fiat and Stablecoins
With over 250,000 users, Nexo is also the world’s biggest interest-earning platform. The company is offering up to 8% interest per year, which is far better than you can get via traditional banks. Interests are compounded, paid daily, and with no fees.
Do you worry about safety? Nexo is 100% Asset-Backed, with funds secured at all times by Lloyd’s of London insurance amounting to $100 million per each customer.
By depositing USD, EUR, GBP, TUSD, USDT, USDC, PAX, or DAI, you will be able to earn 8% annually from day one – no strings attached.
As a registered Nexo customer, you can opt for Nexo branded MasterCard, which will enable you to access your credit line worldwide. The card is not yet available, but every customer will be able to register and receive them once they are ready to be shipped.
Main benefits? Access to over 40 million merchants worldwide and total control over your funds with the ability to freeze or unfreeze your card, create virtual cards, and monitor your transactions in real-time. Nexo cards promise to be also zero fees on all transactions: deposits, maintenance, withdrawals, inactivity, or forex.
Nexo Cryptocurrency Backed Loans – How It Works
Instant Credit Line offered by Nexo enables you to receive the money within minutes, with one of the most straightforward registration processes out there. All you need is an email, and a password – after email confirmation will be immediately transferred to your account, almost ready to use the service. If you decide to go for the loan, first you will need to verify some information for security and KYC requirements. Just go to My Profile, Basic Verification, and provide:
- Name, surname;
- Date of birth;
- Phone number;
After verifying your phone number and setting 2FA, your primary verification will be approved, enabling you to deposit crypto, as well as request loans and withdraw fiat. If you wish to enhance your security, you can always request advanced verification, by providing Nexo either bio page from your passport, ID, or driving license.
In most cases, Nexo will approve you within minutes, and the verification will increase your limits, with up to $200,000 per month of fiat and unlimited crypto withdrawals.
Nexo takes regulatory compliance very seriously, adhering to the strictest KYC procedures. The platform is trusted by Coinbase, Revolut, Bittrex, and many more, with assets backed by Goldman Sachs and CCSS Level 3. The company presents itself as a global entity, with the crypto-backed loans available worldwide, across all US states.
Nexo and Credit Score
While using or applying for Nexo crypto-backed loan, you don’t need to worry about your credit score. Because of Nexo’s business model, your credit scored doesn’t matter, nor it should. As you get more and more credit line, deposited crypto will be pulled from your account and serve as a collateral in case if you will not be able to pay the loan back. What is left, you are free to withdraw any time you want. Even if you should not be able to pay back your loan, your credit score will not be affected.
Collaterals Accepted by Nexo
Nexo enables you to receive crypto-backed loans not only on bitcoin or ether but also many other coins – way more than the competition. As a customer, you will quickly get credit line by depositing: bitcoin, ether, LTC, Nexo token, BNB, XRP, XLM, or TRX. What is more, the company is continuously adding new tokes, with over ten of them to planned be added in the future.
With Nexo, it’s all about simplicity and speed. Your credit line will be available within seconds, as soon as your crypto deposits are recognized. It means that you can register an account, verify it, deposit crypto and withdraw fiat within minutes.
Nexo has one of the most appealing minimums and maximums. You can start with as low as $500, with the maximum set at $2,000,000. Because the company is built around speed and security, it’s not about how much you can get, but how much you can cash out. You will be only able to withdraw fiat after advanced verification, by providing your ID photo. The basic monthly limit is set at $200,000 and can be increased up to $2,000,000 per month – all you need to do is ask.
What is the Loan-to-Value Ratio?
Loan-to-value (LTV) is one of the most important indicators used by Nexo. It represents the size of the loan compared to the value of deposited collateral. Because cryptoassests are unstable, there is a specific limit in place how much you can borrow on your collateral. As for now, Nexo allows you to borrow up to 50% on your bitcoin and ether, 40% on XRP, 90% on stablecoins, 35% on LTC, 30% on BNB, 17% on XLM and 15% on NEXO tokens.
Let’s assume that you want to borrow $10,000 on your Bitcoin. To get the full amount, you will have to deposit twice the value of the loan in collateral around 2,45 BTC (with bitcoin valued $8160).
Nexo Crypto Backed Loan Terms
By taking a loan on Nexo, you also agree to pay it back, with interest, within an indefinite period. That means as long as you don’t hit margin call and pay your interest on time, you can carry the debt as long as you want. Please keep in mind that if you pay the loan within 30 days of the last withdrawal, Nexo will charge you interest on full 30 days. You will be able to pay the loan both by bank transfer or by crypto. As for now, the company accepts payments in BTC, ETH, NEXO, XRP, USD, EUR, GBP, AUD, NZD, and stablecoins.
Remember that although the credit line will be immediately available to use, it might take up to a few business days for your funds to arrive into your bank account. On what you withdraw, interests are calculated daily and debited to your outstanding balance. You might pay the balance early, at any time, partially, both with fiat or crypto.
The interest rate on your crypto backed loan will depend on how you want to pay it back. If you decide to pay the balance via Nexo token, the APR (Annual Percentage Rate) starts as low as 5.9%, calculated, and added to your balance daily, at 00:00 CET (Central European Time). Furthermore, if you decide to pay the loan within the first month fully, you will also be charged interest for the full 30 days.
If you decide to pay the loan via other crypto or fiat, your APR will stand at 24,9% (annual percentage rate). Also, here, the interest is calculated daily, at 00:00 CET, and added to your balance. In such a scenario, you can pay interest any way you want, even by combining crypto and fiat.
Nexo offers state of the art safety and security measures for every offered product. First of all, by depositing assets, you will remain the owner. The platform itself is secured by the largest custodian BitGo, backed by Goldman Sachs. All services performed are based on Cryptocurrency Security Standard Level 3, which requires multiple actors for any critical actions.
When it comes to the assets, they are held in cold storage provided by BitGo. Assets are also insured up to $100 million by the London based Lloyd’s – all with no additional cost to the customers. By using such security measures, your assets are also insured against commercial crime – even if Nexo goes bankrupt.
There are also security measures in place on the client’s end, making sure only the right person can access the account. After creating an account, you will be asked to create a 2FA using the Google Authenticator app available for both Android and iOS. Because the code within the app generates automatically every 30 seconds, this system makes sure only the person holding the token can log in.
Margin Call and Decreasing Value of the Collateral
Cryptocurrency is not known for its stability. Because the value of the collateral can decrease or increase rapidly, there are specific systems in place, ensuring the solvency of the whole system.
What if the Value of the Collateral Decreases
As stated before, every crypto-backed loan has a set value-to-loan ratio. VTL itself acts as margin, in case the value of cryptocurrency drops over time. If the margin will not be enough, and the value of the underlying asset will reach 80% value of the loan, you might get a margin call. Then you will have to either pay a portion of the loan back or deposit more cryptocurrency into your Nexo account. If you don’t, the company will initiate a small automatic loan repayment. If you ignore the call totally, Nexo will liquidate your collateral until the loan and interest can be satisfied in full.
What if the Value of the Collateral Increases
Nexo made sure that as the value of your cryptoassets increases, you will be able to benefit from it. As the value grows, so does your credit line, enabling you to borrow more and more money. On the other hand, you can decide to pay the loan with your assets if you wish to do so.
You can contact Nexo customer support by sending them an email to firstname.lastname@example.org. Alternatively, you can access Live Chat, which is located on the right bottom of the webpage. Alternatively, it is worth to check the Nexo Help Center, which in many cases, is enough to answer any questions or issues you might have with the platform.
Pros and Cons of Using Nexo
Without a shadow of a doubt, Nexo ranks as the most popular, highest reviewed crypto-backed loan company. Marked as “Excellent” by Trustpilot, Nexo is a company of many advantages:
- Fast registration process. You can register an account, verify it, deposit crypto and get a loan within minutes;
- Best on the market 8% Interest on your fiat and stablecoins, paid daily;
- Customer Service; Company ranks highest when it comes to the prompt and helpful customer service;
- Security. Secured by the largest custodian BitGo, backed by Goldman Sachs, with funds insured up to $100 million;
- Service available worldwide, in over 2000 jurisdictions.
As with any crypto-loan services, you need also take into account some disadvantages:
Margin calls. In this way, Nexo is no different from the competition. If the value of the collateral decreases, you might get liquidated.
Centralized. Because it’s centralized, company rely on a big base of customers and 3rd party loan providers;
Nexo and Tax
Your tax situation will depend on the services used. If you decide to earn interest in your deposits, they will count as capital gain, and you will have to pay tax in the majority of the jurisdictions. Please keep in mind that Nexo operates in over 200 countries – it’s your responsibility to contact your tax advisor and pay the government.
When it comes to crypto backed loans, the situation is even more complicated. For example, the US Internal Revenue Service has not yet issued specific guidelines when it comes to crypto-loans. As it’s not a capital gain, most likely you will not have to pay any tax. As stated before, it’s in your best interest to contact tax advisor, which will be able to issue you an accurate answer based on your local laws.
Reviews on Nexo
Nexo is one of the largest and most reviewed crypto loan companies out there. It is easy to find a proper review, with most of them being positive or very positive. People tend to be highly satisfied with the customer service, what the company can offer, and how easy and smooth everything is working. What is more, it is hard to find any bad reviews, and the one which can be, revolve around non-critical matters, like 2FA problems or unstable apps.