More details on Secured Peer-to-Peer Loans
Efficient Pricing & Minimal Fees:
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Set Your Own Interest Rate
Lenders and borrowers set their own interest rates in an open market using Loan Offers (Ask) and Borrowing Requests (Bids). When lenders and borrowers agree on terms, a contract is created. More Info
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Interest rates are determined by the market itself, via supply and demand price discovery. Each contract type has its own interest rate and liquidity depending on the lenders and borrowers' preferences.
4 loan durations (1, 6, 12, 24 months) and 3 currencies (SGD, USD, EUR) are available. Contracts always begin four times a month, on the 1st, 8th, 15th and 22nd.
Borrowers can submit a borrowing request at an interest rate they wish and wait for a lender to accept the request or they can accept an existing lender’s offer, thereby agreeing to the lender’s terms and creating a binding contract between the two parties.
Lenders can do the same by either accepting an existing borrower’s request or, if there are no attractive borrowing requests, make their own lending offers at an interest rate they are willing to lend.
For instance, a lender might say “I am willing to loan USD 100,000 at 6% interest for 12 months” and submit a lending offer to that effect. A few minutes later a borrower might see the offer and can either choose to accept the 6% rate or could make his own counter-offer by submitting a borrower request at 5% interest.
Unfulfilled borrowing requests or lending offers can be cancelled without penalty, so the lender could counter-offer by cancelling his 6% lending offer and re-submitting a 5.5% lending offer. If the borrower likes the 5.5% rate he could the cancel his 5% borrowing request and accept the lender’s 5.5% lending offer which finalizes an agreement.
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Enjoy the Lowest P2P Fees in the Industry
A high degree of automation and integration means that our administrative charge is only 0.5% of the principal on both the lender and borrower side. More Info
- We can offer low fees because our average P2P loan is substantial, because we highly automated our processes, and because the storage system integration eliminated many of the administrative costs that a stand-alone system would incur.
Safe & Reliable:
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Secured By 200% * Reserved Gold and Silver Collateral
Borrower-owned S.T.A.R. Storage gold, silver and platinum parcels are locked and assigned to the lender until the loan is repaid. More Info
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Our P2P platform is designed to protect the lender by minimizing the risk of borrower default through a 200%* collateral coverage. The borrower benefits as well because the high collateral coverage should result in a comparatively low interest rate and leaves the borrower free to use the loan proceeds without restrictions.
Only customers who own physical S.T.A.R. Storage parcels at The Safe House (TSH) can participate as borrowers because they must have bullion parcelized in Singapore to use as collateral. Pre-ordered bullion which has not arrived yet or bullion stored within Safe Deposit Boxes cannot be used as collateral.
The borrower retains full ownership of the metal, which remains at TSH, and continues to enjoy all the protective features of S.T.A.R. Storage. Once the borrower has committed to the loan, the borrower agrees to have a lien placed against the chosen collateral in favor of the lender which will be removed upon full repayment of the loan.
The borrower can loan up to 50% of the collateral metal valuation (200% collateral coverage*) for 6, 12 or 24 month loans. Collateralized parcels cannot be taken delivery of or sold while serving as collateral. Silver Bullion will revalue metals roughly every five minutes and display prominently how much the coverage is throughout the duration of a loan.
*Only the 1-month loans can be funded with a lower ratio of 160% (or about a 62.5% loan to value ratio).
Should the collateral ratio fall to 125% (i.e. the spot prices fall drastically), the borrower will receive a margin call to either pledge more bullion as collateral or provide a partial security deposit for the loan. If the collateral drops to 110%, Silver Bullion will automatically liquidate the borrower’s metal position to ensure that there are enough funds to pay the lender.
Convenient, Private and Extendable:
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Borrow or Lend in Minutes
Once you have a Silver Bullion Storage account lending or borrowing is done in mere minutes. More Info
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This efficiency is made possible because:
- Of the integration with our storage and authentication system, thereby requiring minimal additional administrative work.
- No need for separate borrower credit evaluations because loans are always fully backed by collateral.
- No need for additional third party lien paperwork because Silver Bullion already is the collateral custodian.
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Privacy and Systemic Risk Protection
Silver Bullion, as your bullion custodian, enforces contract terms and acts as an agent for both parties who are identified only by their eight-digit S.T.A.R. ID. More Info
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Our Storage System is a carefully designed wealth protection system whose checks and balances are designed to ensure the stored gold and silver is physically present, free of third party encumbrances or dependencies, genuine, and protected jurisdictionally, legally and physically. Furthermore by building and operating our own Vault we have eliminated almost all intermediary and banking dependencies.
The Secured Peer-to-Peer Loans Platform builds on this established platform and utilizes the anonymous S.T.A.R. ID to keep the lender's and borrower's identities private, as a contract only lists parties by their ID.
Although direct counterparty privacy is maintained, the lender still benefits from the system’s extraordinary collateral transparency features such as photographs of the bullion, the parcel ownership list, DUX tests, third party audits and excellent liability protection made possible through Chubb Insurance (which covers the often-excluded "Mysterious Disapearance" event).
By utilizing our peer-to-peer loans, both lenders (through the pledged bullion collateral) and borrowers (through their bullion property) enjoy strong protections against upcoming systemic crises, such as a currency crisis, mass financial bankruptcies, sovereign defaults or western gold nationalization events.
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Contract Rollovers
Contract rollovers allow borrowers to rollover a loan, at prevailing rates, instead of returning the principal. Lenders can re-lend funds as soon as possible, without having to miss the next loan period. More Info
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Rollovers are similar to a loan renewal, but the lender or borrower can choose to deal with a different party and with a different duration. Rollovers are based on the interest rates presently offered. In essence a new loan is used to settle the old loan so that a borrower does not need to repay, or repay only a fraction, of the funds due at maturity.
A borrower, for example, having an existing Loan “A” can, valuations permitting, commit a new loan, loan “B” to pay back the principal and interest of Loan “A” instead of sending funds from elsewhere to settle Loan “A”. During such a rollover, the borrower’s collateral will be switched from Lender A to Lender B and the Loan B payout will be used to settle Loan A.
Rollovers allow for potentially indefinite borrowing by a lender, as long as collateral valuations permit (200%* coverage or greater). For lenders, rollovers allow for funds to be re-lent efficiently and without downtime.
*Only the 1-month loans can be funded with a lower ratio of 160% (or about a 62.5% loan to value ratio).
We standardized loans to start on the 1st, 8th, 15th and 22nd of the month and created the Sweeper Fund, to support such rollovers. Rollovers greatly enhance flexibility and efficiency for both lenders and borrowers.