Binance Loans is the latest cryptocurrency lending service from Binance, allowing users to borrow with collateral and freely use the borrowed funds in the cryptocurrency market.
This method is similar to bank loans but is more flexible as borrowers can withdraw funds from the Binance ecosystem for investment or trading outside the exchange.
MAIN CONTENT
Binance Loans allows borrowing up to 65% of the collateral value with flexible terms and interest rates.
Choose a suitable borrowing option depending on the need to move capital and the borrowing period.
The loan process is simple, requiring account verification and the selection of collateral assets along with the loan term.
What is Binance Loans?
Binance Loans is a cryptocurrency lending service launched by Binance in 2020 to meet the needs of users who want to leverage their existing cryptocurrency assets to borrow funds for investment or business outside the Binance ecosystem.
This service is similar to how bank loans work but uses cryptocurrency as collateral. Users can borrow up to 65% of the collateral value, and the borrowed funds can be transferred out of their Binance account, suitable for a variety of business purposes.
The Binance Loans service allows investors to flexibly use capital, while keeping assets on the exchange and taking advantage of various investment opportunities in the cryptocurrency market.
Zhao Changpeng, CEO of Binance, 2021
Currently, Binance Loans only supports certain cryptocurrencies like Bitcoin, Ethereum, Ripple, EOS, and Litecoin to borrow USDT or BUSD. This is a convenient option for professional investors looking to increase their return on investment.
Guide to Using Binance Loans
How to choose the right lending service
The choice of borrowing method depends on the specific needs of users in trading and capital management.
If you are a trader who often trades directly on Binance, Margin will be more suitable for short-term loans with flexible borrowing fees. Conversely, if you need to withdraw borrowed funds outside of Binance to invest in cryptocurrencies that are not in the ecosystem or other products and services, Binance Loans is the optimal choice with fixed terms and stable fees.
An important point is that Binance Loans is suitable when you want to move borrowed capital out of your Binance account, while Margin is limited to internal use for trading on the exchange.
Guide to Borrowing on Binance
To borrow through Binance Loans, you first need to register an account and complete security verification via phone and Google Authenticator to ensure safety. Then, deposit coins into your Binance wallet to use as collateral.
Next, on the Binance Loan page, select the cryptocurrency you want to borrow, the amount needed, choose the collateral assets, and the appropriate loan term (7, 14, 30, 90, or 180 days). The system will display parameters such as LTV ratio, interest rate, liquidation price, and total amount to repay for you to review.
When everything is accurate, you confirm and start borrowing immediately. The borrowed funds can be used flexibly for personal purposes and transferred out of Binance if needed.
Simplifying the borrowing process and offering multiple time options makes Binance Loans an effective financial tool for cryptocurrency users.
Helen Hai, Director of Binance China, 2022
Summary
Cryptocurrency loans from Binance Loans are an optimal solution for those with cryptocurrency assets but want access to capital without liquidating assets. With flexible borrowing options and not relying on traditional credit scores, anyone owning crypto can borrow as needed.
In addition, DeFi options allow for quick borrowing through smart contracts without the need for peer-to-peer interaction, making the borrowing experience more convenient and secure.
Frequently Asked Questions
Which cryptocurrencies are supported for borrowing by Binance Loans?
Currently, Binance Loans supports borrowing USDT and BUSD with collateral assets being Bitcoin, Ethereum, Ripple, EOS, and Litecoin.
How is the interest rate calculated for loans at Binance Loans?
Fixed interest rates for borrowing terms of 7, 14, 30, 90, or 180 days, allowing borrowers to easily control loan costs.
Can borrowed funds be withdrawn from Binance?
Yes, the outstanding advantage of Binance Loans is that it allows for the withdrawal or transfer of borrowed funds to platforms outside of Binance.
What are the conditions for borrowing cryptocurrency on Binance?
A fully verified Binance account is required, along with cryptocurrency assets for collateral and compliance with loan regulations.
How do Binance Loans and Binance Margin differ?
Binance Loans is suitable for fixed-term borrowing and withdrawing funds outside Binance, while Margin offers flexible short-term loans but funds can only be used for trading within Binance.
Source: https://tintucbitcoin.com/binance-loans-la-gi/
Thank you for reading this article!
Please Like, Comment, and Follow TinTucBitcoin to stay updated on the latest news about the cryptocurrency market and not miss any important information!
