{"id":11350,"date":"2024-04-22T09:56:00","date_gmt":"2024-04-22T09:56:00","guid":{"rendered":"https:\/\/www.sos.cryptobel.be\/docs\/how-do-defi-loans-work\/"},"modified":"2025-02-05T14:50:00","modified_gmt":"2025-02-05T14:50:00","slug":"how-do-defi-loans-work","status":"publish","type":"docs","link":"https:\/\/www.sos.cryptobel.be\/en\/docs\/faq-web3\/decentralized-finance-defi\/how-defi-works\/how-do-defi-loans-work\/","title":{"rendered":"How do DeFi loans work?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Decentralized finance (DeFi) presents a lending process <\/strong>that bypasses traditional banks and intermediaries. Instead, loans are made <strong>directly between peers<\/strong>. DeFi offers borrowers and lenders the chance to<strong> find a platform, strike a deal and set up a smart contract<\/strong>; and voil\u00e0, the loan is set up.  <\/p>\n\n<p class=\"wp-block-paragraph\"><strong>A<\/strong> major <strong>advantage<\/strong> lies in the fact that borrowers <strong>don&#8217;t have to sell their cryptocurrencies<\/strong> to obtain liquidity.<\/p>\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"> <strong> For example,<\/strong> if you own a house that you want to keep while you buy a new one, you could use your old car as collateral to get a loan in DeFi to buy the new one.<\/p>\n<\/blockquote>\n\n<p class=\"wp-block-paragraph\">  Similarly, with DeFi loans, <strong>you keep your cryptocurrencies while benefiting from more advantageous terms than traditional loans<\/strong>.<\/p>\n\n<p class=\"wp-block-paragraph\">This approach <strong>eliminates barriers<\/strong>, speeding up transactions while providing <strong>returns on deposited funds<\/strong>.<\/p>\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"921\" height=\"226\" src=\"https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5.png\" alt=\"\" class=\"wp-image-9923\" srcset=\"https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5.png 921w, https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5-300x74.png 300w, https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5-768x188.png 768w, https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5-20x5.png 20w, https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5-32x8.png 32w\" sizes=\"(max-width: 921px) 100vw, 921px\" \/><\/figure>\n\n<p class=\"wp-block-paragraph\">source : Ledger<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Decentralized finance (DeFi) presents a lending process that bypasses traditional banks and intermediaries. Instead, loans are made directly between peers. DeFi offers borrowers and lenders the chance to find a platform, strike a deal and set up a smart contract; and voil\u00e0, the loan is set up. A major advantage lies in the fact that [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"parent":11357,"menu_order":38,"comment_status":"open","ping_status":"closed","template":"","doc_tag":[],"class_list":["post-11350","docs","type-docs","status-publish","hentry","no-post-thumbnail"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How do DeFi loans work? - SOS Cryptobel<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sos.cryptobel.be\/en\/docs\/faq-web3\/decentralized-finance-defi\/how-defi-works\/how-do-defi-loans-work\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How do DeFi loans work? - SOS Cryptobel\" \/>\n<meta property=\"og:description\" content=\"Decentralized finance (DeFi) presents a lending process that bypasses traditional banks and intermediaries. Instead, loans are made directly between peers. DeFi offers borrowers and lenders the chance to find a platform, strike a deal and set up a smart contract; and voil\u00e0, the loan is set up. A major advantage lies in the fact that [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.sos.cryptobel.be\/en\/docs\/faq-web3\/decentralized-finance-defi\/how-defi-works\/how-do-defi-loans-work\/\" \/>\n<meta property=\"og:site_name\" content=\"SOS Cryptobel\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-05T14:50:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.sos.cryptobel.be\/wp-content\/uploads\/2024\/04\/image-5.png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@cryptobel_asbl\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.sos.cryptobel.be\/en\/docs\/faq-web3\/decentralized-finance-defi\/how-defi-works\/how-do-defi-loans-work\/\",\"url\":\"https:\/\/www.sos.cryptobel.be\/en\/docs\/faq-web3\/decentralized-finance-defi\/how-defi-works\/how-do-defi-loans-work\/\",\"name\":\"How do DeFi loans work? 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