Who's paying for transaction fees in Loan?

[cyyap95]

I've had some coins sitting in my wallet, and think if I can grow by making some interest by lending them,
however due to the recent rise of transaction fees, sending $5 is like sending $6 sometimes more,
who's going to be responsible for the fees?

What's the standard practice on this?

Thanks for answering
cyyap95

[Quartx]

I've had some coins sitting in my wallet, and think if I can grow by making some interest by lending them,
however due to the recent rise of transaction fees, sending $5 is like sending $6 sometimes more,
who's going to be responsible for the fees?

What's the standard practice on this?

Thanks for answering
cyyap95

Usually the side performing the loan will state loan amount, of course all amounts stated excludes fees by default. Loaners will usually set an appropriate fee, on the other hand, borrowers may send or return the loan with abysmal fees.

[Rinder]

Usually when someone does lend the money to others, being bitcoins you already put your comission and the fee is inside or should be, lets suppose someone wanna 0,05 btc you will lend with a repayment of 0,055 btc, soo with this you are able to proof as well to cover the fees. I doubt the lending market is raising the fees, since there are people lending with a good interest already.

[LuanX3]

From what I am seeing, most lenders shoulder the fees. But seems like the fees are getting pretty absurd and maybe we'll see more people asking to share for the fees. Though I think borrowers should return the favor by putting enough fees as well.

[Monnt]

From what I am seeing, most lenders shoulder the fees. But seems like the fees are getting pretty absurd and maybe we'll see more people asking to share for the fees. Though I think borrowers should return the favor by putting enough fees as well.

Yes, sharing seems as a feasible solution here. While taking loan, lender needs to take care of tx fees and on re-payment, borrower needs to pay the tx fees. This must have some sensible approaches and both the parties must enter a gentlemen agreement for including at least low priority fees as reputed site's suggestions.

Alternative solution for priority fees : the loan period should start only after the first confirmations and similarly closing time also should be calculated based on repayment's confirmation time.

Just suggestions, probably the real time lenders might have their own convenient plans.

[jc89]

Naturally, the lender shoulders the transaction fees or this will depend on the agreement of both parties. If the loaner agrees that he will shoulder the fee or the other way around then that's it. Since this is lending, obviously that the lender will gain from it so the transaction fee paid by the lender will be covered by the profit gained. Also, in returning the loaned bitcoin, the loaner will be responsible for the transaction fee back to the lender so it seems like a break even to me.

[Kevin77]

Naturally, the lender shoulders the transaction fees or this will depend on the agreement of both parties. If the loaner agrees that he will shoulder the fee or the other way around then that's it. Since this is lending, obviously that the lender will gain from it so the transaction fee paid by the lender will be covered by the profit gained. Also, in returning the loaned bitcoin, the loaner will be responsible for the transaction fee back to the lender so it seems like a break even to me.

But when the borrower needs to pay the transactions fees while re-paying the loans, it seems micro loans will be no more meaningful at least those short term loans. For micro short term loans, lender needs to be responsible for paying tx fees and needs to accept to deduct fee amounts from interest portion. Otherwise, borrowers may need to pay more for transaction fees than what they are paying for interests.

In that case, it may seem like paying out double the interests. I am sure that bitcoin lending must be a business getting affected due to bitcoin's scalability issue.

[AjithBtc]

The lenders were the one who takes care of the transaction fee. As an user stated micro lending won't make sense, because what they provide as fee won't be got back as interest as the price flutuation gives a variation with respect to the time.

[jc89]

Naturally, the lender shoulders the transaction fees or this will depend on the agreement of both parties. If the loaner agrees that he will shoulder the fee or the other way around then that's it. Since this is lending, obviously that the lender will gain from it so the transaction fee paid by the lender will be covered by the profit gained. Also, in returning the loaned bitcoin, the loaner will be responsible for the transaction fee back to the lender so it seems like a break even to me.

But when the borrower needs to pay the transactions fees while re-paying the loans, it seems micro loans will be no more meaningful at least those short term loans. For micro short term loans, lender needs to be responsible for paying tx fees and needs to accept to deduct fee amounts from interest portion. Otherwise, borrowers may need to pay more for transaction fees than what they are paying for interests.

In that case, it may seem like paying out double the interests. I am sure that bitcoin lending must be a business getting affected due to bitcoin's scalability issue.

As to what I've said earlier, it will depend on the agreement of both parties. If the borrower agrees that he will pay for the tx fee then we cannot do anything, he agreed. And in my opinion, this is a bad case and I will agree on you that micro loans is not a wise choice.

To avoid confusion, below is the typical scenario for bitcoin loans:

- Borrower will borrow 1 BTC to Lender.
- Lender sends 1 BTC to Borrower and Lender pays for the transaction fee.
- Lender wants 1% interest which is 0,01 BTC. (I am sure that the transaction fee paid by Lender is less than 0.01 BTC)
(Let us assume that both parties agreed about the interest)
- Borrower receives the 1 BTC and used it and gain a profit from it.
- Borrower will return the borrowed bitcoin plus the interest.
- Borrower sends 1.01 BTC to Lender and Borrower pays for the transaction fee.
(Let us just assume that Borrower gained more)

Just an example. And if you noticed, both pays for the transaction fee where both fell in a break even (in terms of the transaction fee).

[cyyap95]

Naturally, the lender shoulders the transaction fees or this will depend on the agreement of both parties. If the loaner agrees that he will shoulder the fee or the other way around then that's it. Since this is lending, obviously that the lender will gain from it so the transaction fee paid by the lender will be covered by the profit gained. Also, in returning the loaned bitcoin, the loaner will be responsible for the transaction fee back to the lender so it seems like a break even to me.

But when the borrower needs to pay the transactions fees while re-paying the loans, it seems micro loans will be no more meaningful at least those short term loans. For micro short term loans, lender needs to be responsible for paying tx fees and needs to accept to deduct fee amounts from interest portion. Otherwise, borrowers may need to pay more for transaction fees than what they are paying for interests.

In that case, it may seem like paying out double the interests. I am sure that bitcoin lending must be a business getting affected due to bitcoin's scalability issue.

Exactly the reason I'm asking this questions, micro loan seems to be impossible as the fees alone might be much more than the interest at this moment.


===


Thanks for the answers from everyone, I now understand how lending works here.

[Celsiuss]

I don't see why this is a problem. The loan wanted is amount n bitcoins.
loan = n - fees

In your example it would be
5 - 1 = 4

Simple and easy, I don't see the problem here

[Pearls Before Swine]

I don't see why this is a problem. The loan wanted is amount n bitcoins.
loan = n - fees

In your example it would be
5 - 1 = 4

Simple and easy, I don't see the problem here

Lol, the problem here is that no one wants to pay the miners' fee, and for damn good reason.  It's way too high in a lot of cases, and if bitcoin keeps rising it's only going to keep getting higher.  It's more of a problem than you think, because it just adds to the haggling that needs to be done before a loan is given...or before any deal between two parties is done.  It's a pain in the ass.

OP, what the hell did DH give you a negative for?  There's not even a reference link given.  That's bullshit.

[The_Dark_Knight]

I've had some coins sitting in my wallet, and think if I can grow by making some interest by lending them,
however due to the recent rise of transaction fees, sending $5 is like sending $6 sometimes more,
who's going to be responsible for the fees?

What's the standard practice on this?

Thanks for answering
cyyap95

I think the best thing to do is make yourself clear from the beginning who is expected to pay the mining fees, since the fees are getting out of control this is especially important in small loans, but I suppose the easiest solution is that every user pays for the fees of their own transactions.

[ubercool]

I've had some coins sitting in my wallet, and think if I can grow by making some interest by lending them,
however due to the recent rise of transaction fees, sending $5 is like sending $6 sometimes more,
who's going to be responsible for the fees?

What's the standard practice on this?

Thanks for answering
cyyap95

I think the best thing to do is make yourself clear from the beginning who is expected to pay the mining fees, since the fees are getting out of control this is especially important in small loans, but I suppose the easiest solution is that every user pays for the fees of their own transactions.

I too would suggest a sharing system for loans as the fees are getting heavier day by day and a person whose already in some financial problems will get more troubled. While giving the loan sender should pay and while returning it, the receiver should pay it. That will be a fair game for everyone but as I see, in the real world the loan giver is never bothered to pay the fees.

[omonuyak]

I think crytocurrency system is quite different from that of banking system. In banking system the fees on loan are being charged from the amount on the loan from the borrowers and is called management fees in my country but in bitcoin lending, I think you the lender will be charged by bitcoin network.

[Jacob211]

I don't really know about this but in my opinion I think lender will pay the transaction fee or they can share it with borrower if the lend amount is large