Crowd loan
A crowd loan is a single loan funded by many independent lenders rather than one counterparty or a shared pool. Each lender reviews the borrower, offers an amount and an interest rate of their own choosing, and the borrower accepts the set of offers that best fits their request. Funds are held in a smart-contract escrow — not a company account — from the moment an offer is made until the loan is repaid or the offer is refunded.
How is a crowd loan different from pool lending?
In pool lending, deposits are pooled and an algorithm sets one rate for everyone; lenders are exposed to the whole pool. In a crowd loan, every lender picks a specific borrower and prices that loan themselves, so risk and return are chosen per loan, not inherited from a pool.
The trade-off is granularity for convenience: pool lenders get passive exposure, crowd lenders get control — over who they fund, how much, and at what rate.
Who sets the interest rate on a crowd loan?
Both sides do. The borrower sets a maximum APR they are willing to pay when they create the request; lenders then offer at or below that cap. Competitive offers at lower rates are more likely to be accepted, so the final blended rate is discovered by the market, one offer at a time.
What happens if a crowd loan is not fully funded?
It depends on how close it got. If offers reach at least 80% of the requested amount, the borrower can still accept them and start the loan with what was raised. Below that threshold the loan cannot start — it expires, and every lender withdraws their offer in full from the escrow contract.
Acceptance is the commitment point: an offer the borrower accepts becomes part of the active loan until repayment, while offers that are never accepted stay refundable.
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