Why should I borrow from Binance Loans?

Ranjan Yadav

Published in

Coinmonks

5 min readJun 21, 2022

Borrow for Spot, Margin, or Futures Trading. Stake to earn a high APY.

Easy repayment. Hourly interest calculation, and no transaction fee.

Cryptocurrency Loans: An Introduction

The Binance Loan is an exciting financial service; letting users fulfill their short-term liquidity needs. Binance Loan lets you borrow up to 65% of the collateral value, using these loan funds is your own prerogative. Fantastic, isn’t it? Way better than your bank’s personal loan, for sure. CeFi lending platforms offer enhanced security; they are usually supported by reputable cryptocurrency exchanges (such as Binance Futures).

What differentiates cryptocurrency loans is their accounting. Simply because in cryptocurrency loans, traders can utilize their cryptocurrency assets as collateral to fulfill lender formalities.

Availing Bitcoin loans is easy and swift. These loans offer enough cryptocurrency asset liquidity and convertibility, to capitalize the market prospects. Binance Loan’s interest accumulates once the fund is borrowed and it is calculated hourly (minimum 0.00000001 BUSD).

Simply submit a loan request to initiate a collateral transfer from Spot Account, and then receive loan in your Spot Account. Repay per your convenience, to get the collateral in your Spot Account. No transaction fees to pay. Inspiring, isn’t it? There’s more, read on.

Advantages of Binance Loans

Did you know?
You can stake your collateral to offset Binance Loan interest rate.
There’s no early repayment penalty to pay.

Flexible loan terms: Flexible loan terms are available for 7, 14, 30, 90, and 180-day loans. Binance Loans’ interest (possible to be paid in advance) calculation is done per the actual borrowing hours. Post the expiration time, the interest is charged 3 times on an hourly basis. If either of the positions is overdue for over 168 hours, they are closed automatically for repayment.
No early repayment penalties to pay: Yes, that’s right. Interest penalty will not be levied on an early repayment of a Binance Loan. Upon returning the principal amount, the interest is charged per the real borrowing hours.
Freedom to use funds: Use funds as you deem fit. There is no restriction on the usage of the loanables (be it to trade, stake, or withdrawal).
Loans staking: You can stake collateral assets to reap cryptocurrency rewards, and cushion the loan interest rate. The collateral assets used for borrowing are deposited in a cryptocurrency wallet for blockchain network support. Against this, you stand to receive rewards that reduce the interest rate. In the case of a BTC loan, traders can utilize a BTC loan as a collateral to secure a BUSD (or USDT) loan. Upon repaying the loan and its interest, the collateral would be sent to your Binance Spot Account. The appreciated value of BTC during the loan duration tends to accrue profit to the borrower.

Example of Using Binance Loans

Billy the businessman is in a dire need of working capital for a healthy turnover. He is HODL’ing 5 BTC (Bitcoin) as of now (not to sell for a long-term). Know what? Billy is lucky enough. Know why? Well, Billy can use his 5 BTC as collateral to subscribe to Binance Loan. He can simply loan out his cryptocurrency assets to avail assets (on loan) of his BTC asset’s corresponding value.

Billy can either use this loan amount for trades on Binance, or withdraw the fund for his turnover needs. Billy can avail a Binance Loan in easy-to-follow steps.

Billy would need to:

Log into his Binance account
Click on “Finance” and select “Crypto Loans.”
Make a choice of the cryptocurrency to be borrowed and collateralized, respectively.
Enter the loan amount. Select the “Loan Term.”

The corresponding collateral rate (initially) would differ across various cryptocurrencies. The specific rate depends upon the loan page display. After interest and repayment amount confirmation, Billy would click “Start borrowing now,” and access the order page. Then Billy would click on the “Binance Loan Service Agreement” checkbox for acknowledgement. Billy clicks on “Confirm” after reviewing the terms and conditions. Guess what? Billy would then feel the ultimate enlightenment as he receives the loan assets in his Binance Spot Wallet.

Yes, I get it. As soon as getting it, Billy would then be wondering about the loan’s timely repayment. When Billy is ready to repay the loan on or before the repayment date, Billy would simply need to click on the “Orders” tab, to access “Loan History.” Finally, Billy would click on “Repay” to repay the cryptocurrency and the interest. After repaying the loan and the interest, Billy would witness his collateral reappearing in his own Binance Spot Wallet. Pretty clean, isn’t it? Sure is.

When are you subscribing to your Binance Loan?

The disbursement speed of cryptocurrency loans make Binance Loans appealing to market participants. As a result, tapping on cryptocurrency assets’ liquidity and convertibility (plus opportune market avenues) gets real simple and swift. Just remember, and never forget: You can borrow up to 65% of the value of your collateral via Binance Loans, using loaned funds is your personal prerogative.

Learn more about Binance Loans via the Binance Loan FAQs.

Pros and cons of Binance Loans.

New to Binance? Register today!

Disclaimer: This article is meant for educational purposes only and should not be construed as an investment advice.

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Why should I borrow from Binance Loans?

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Written by Ranjan Yadav