WHY SHOULD I BORROW FROM BINANCE LOANS?
13/06/2022
By Damilola Ogungbayi olushola
Table of contents:
- Introduction of Crypto Loans
- Advantages of Binance Loans
- Flexible loan terms
- Early repayment
- Use funds anywhere
- Loans staking - How does Binance Loans works
- How to repay
- How to borrow - Example of Using Binance Loans
- Make your first Binance Loans today
- Conclusion
INTRODUCTION OF CRYPTO LOANS
The fundamentals of crypto loans are very similar to traditional loans. One key factor where they differ lies in how the funds are accounted for.
With traditional loans, banks or other institutions use credit scores to calculate the amount of risk they can invest into a borrower. With crypto loans, credit scores are totally unnecessary because traders can use their crypto assets as collateral for the lender to hold until the loan is paid back.
Aside from this difference, the mechanisms behind the loan are similar in a technical sense. Crypto loans generally collect interest hourly, instead of monthly. Also, the terms for loans can be shorter than traditional loans.
With crypto loans, traders can borrow from 7 to 180 days on platforms such as Binance Loans.
The reason crypto loans operate on such a shorter time scale is that cryptocurrencies are much more volatile than traditional currencies, making them riskier for the lender and borrower. Should a cryptocurrency drop drastically in value, the collateral a lender took on could become worth much less than what was borrowed. Thus, hourly rates and shorter borrowing terms are applied.
ADVANTAGES OF BINANCE LOANS
1.Flexible terms:
We provide 7, 14, 30, 90 and 180-day loan terms. Interest is calculated based on hours borrowed.
2.Early repayment:
Repay anytime before the due date with no penalty fees. Once you return the loan amount, we’ll only charge you an interest fee based on hours borrowed.
3.Use funds anywhere:
Feel free to use your borrowed crypto anywhere on the Binance ecosystem, from trading to making payments. You can also withdraw if you want to use your funds outside Binance.
4.Loans staking:
Some of our collateral options can also be staked to generate crypto rewards and reduce loan interest fees.
HOW DOES BINANCE LOANS WORK
If you’ve registered for a Binance account and completed identity verification, you’re ready to start borrowing on Binance Loans. Follow the instructions below on borrowing and repaying your first Binance Loan.
How to borrow:
Step 1:
Decide which asset you want to borrow and which asset you’ll use as collateral. You can choose from a vast selection of popular cryptocurrencies like BTC, ETH, BUSD and more.
Step 2:
Select how long you want to borrow. Timeframes range from seven days to 180 days.
Step 3:
Our platform will automatically determine the hourly interest rate based on your collateral amount.
Step 4:
Feel free to use your borrowed funds anywhere in or outside the Binance ecosystem!
How to repay:
Step 1:
Repay your loan via the Order Page.
Step 2:
You’ll pay the interest fee first and then the principal amount.
Please note: If you’re repaying early, interest will still be charged according to how long you borrowed (hours). You will not receive a penalty for repaying early.
EXAMPLE OF USING BINANCE LOANS
Another common use for a crypto loan would be to receive interest on assets. For instance, traders can use BTC as collateral to acquire a loan in BUSD, USDT or any other stablecoin. The collateral will likely be worth more than the loan itself, but once the loan is repaid including interest, the collateral is returned. At this point, the BTC may have appreciated, leaving the borrower with a profit.
Additionally, market participants prefer crypto loans rather than traditional loans because of the speed at which funds can be acquired. BTC loans can be acquired nearly instantly, making your crypto assets extremely liquid and convertible, to capitalize on market opportunities quickly and easily.
MAKE YOUR FIRST BINANCE LOAN TODAY
Cryptocurrency loans are a simple and easy way to borrow extra funds. You don’t need a credit score, interest fees are lower and you can borrow up to 65% of your collateral value on Binance Loans. But remember, the crypto market is volatile, and loans come with their own set of risks. Before making a loan, ensure you have more than enough in your wallet or portfolio to cover interest fees, collateral and principal repayment.
CONCLUSION
If you’re looking to utilize funds beyond your own means, or need to have ‘fast cash’ but don’t want to liquidate your crypto assets, a crypto loan can work nicely for you.
With numerous options in cryptocurrencies to borrow and count as collateral, the ability to trade has grown even wider. And since you don’t need to have a credit score to apply for a crypto loan, anyone with crypto-assets can open a loan at will. Not only this, but they can choose how they wish to borrow.
To get started on Binance Loans click on the link below
