Part 4/9:
To highlight the difference between traditional loans and DeFi, let's look at a hypothetical traditional bank loan for the Tesla:
Total Price: 2.5 million pesos ($47,000)
Down Payment: 20% (approximately 500,000 pesos)
Interest Rate: 6% per year
Payback Period: 60 months (5 years)
In the Philippines, a bank loan may entail a lot of hassle, including a painstaking credit investigation that examines your financial and personal background, which can feel invasive and demeaning. Such processes are incredibly time-consuming and not feasible during holiday weeks.
Conversely, using a protocol like A allows borrowers to bypass all that traditional bureaucracy, primarily requiring only a Bitcoin deposit.