How to Get a Binance Loan

Financial loans and bailouts are not a new concept. In fact, loan services have been around for a long time. However, it is often restricted to liquid cash. With the advent of cryptocurrency, the world has seen a shift in banking and financial services. One of such introductions is the crypto loan – a loan that does not require credit scores. Read on for more information on everything you need to know about the Binance loan and how to get it.

What are Crypto Loans?

A Crypto loan is a type of loan that requires a portion of your crypto asset as collateral until you repay the loan. Unlike a traditional loan, you don’t need to calculate your credit scores to know the risks or how much you can borrow. Instead, the lender only needs to hold a portion of your asset as collateral until you repay the loan.

Cryptocurrency traders understand the risk and volatility involved in trading. As a result, holding digital assets can be challenging during stagnant markets, especially when you need funds. Instead of liquidating your assets, you can use a crypto loan as a funding source.

Crypto loans involve taking cryptocurrency from a user and providing it to another user for a fee. The service is available on centralized and decentralized platforms, and the method of managing the loans varies from one platform to another.

The entire lending process involves three parties: the decentralized finance platform or a crypto exchange, the borrower, and the lender.

Most times, the loan taker is required to put up collateral before borrowing. However, there are flash loans that don’t require collateral. On the other hand, a platform lends out funds from another user or uses a smart contract to mint stable coins. Lenders include their assets to a pool that manages the process and remits to them a cut of the interest.

There are different types of crypto loans offered by various platforms, including Binance.

Advantages of Binance Loans

Flexible loan terms

Binance provides loans with various dates of repayment. Unlike traditional loans, traders can borrow from 7 to 180 days on the platform. Since cryptocurrencies are volatile, you can borrow on a shorter time frame like 7, 14, 30, 90, and 180 days. The interest on the loan is calculated hourly, in which less than an hour is also calculated as one hour.

Binance allows borrowers to renew their loan order within 24 hours regardless of the token they borrow. Note though, that loan staking orders and 180-day orders cannot be renewed. Plus, you can only renew your order once.

Early repayment without penalty

The Binance loan is not like other conditional loans that borrowers cannot pay before the agreed date. Borrowers can repay in advance without suffering any penalty for early repayment.

Use funds anywhere

Binance does not restrict the use of its Binance crypto loan. As a result, the borrower can use it for any purpose, including staking, futures, margin, and spot markets, or even withdrawing the funds.

Loans staking

The Binance loan terms allow you to stake the collateral and generate profit to reduce the interest you need to pay. Although the profit from staking fluctuates, all loan orders participating in staking are calculated based on the interest rate and profit displayed at the time of borrowing.

Binance grants instant access to its loan. The facility is also more accessible to the underbanked population, including people with limited access to traditional institutions, little or no credit history, and self-employed workers. But you risk liquidation if the value of your collateral falls below the requirement. In this case, you will need to add more liquidity to avoid liquidation. Also, late payment after the overdue duration is 2% of the total borrowed amount.

Examples of Using a Binance Loan

Binance crypto loans are very attractive to traders that need funds without liquidating their assets. It is useful for receiving interest on assets and staking. For example, a trader can use Bitcoin as collateral to acquire a loan in any stablecoin. Since the collateral is likely worth more than the loan itself, the borrower has no choice but to repay the loan and interest.

However, what do you think will happen if BTC, the collateral, has appreciated during the period? The borrower ends up with a profit. In other words, you will receive the asset you used as collateral, and there is a chance that you will receive more due to an appreciation in value.

The process of applying for and receiving crypto loans is faster than traditional loans. Instant loan application is possible because your asset is liquid and convertible. As a result, you can capitalize on market opportunities.

Decentralized financed and centralized finance options require KYC. Not only this, but users must follow strict regulations. However, centralized finance platforms have better security and are backed by a reputable exchange like Binance. On the other hand, decentralized options don’t offer the same interest rates that are available through CeFi platforms. Although DeFi does not require personal identification to access assets, the users must bear the risk of smart contract hacks.

You can borrow a loan from Binance and stake some collateral assets to reduce your loan rate or generate crypto rewards. Also, there is a chance that your asset locked up as collateral will appreciate at the time of repayment.

Steps to Get a Binance Loan

1. Register for a Binance account and complete the identity verification
2. Decide which asset you want to borrow and which asset to use as collateral
3. Select the duration of the loan between 7-180 days
4. View the hourly interest rate based on the collateral amount
5. Use your fund
6. Repay loan

1. Register for a Binance account

The first step you must complete is to register for an account on Binance. Not only this, but you must verify to ensure easy transactions. You can register by mail, a mobile number, or on the Binance app. Visit the Binance website and click on register to open an account. Complete the security, phone, and google verification, and you can proceed with the Binance loan application.

2. Decide which asset to borrow and which to use as collateral

Binance has a vast selection of cryptocurrencies. It includes ETH, USDT, BTC, BUSD, etc. Visit the Loans sections (from the top menu) to know the assets you can request and the ones you can put up as collateral. You will also find information on the borrow limit and price index.

3. Select the duration of the loan between 7-180 days

On the same page, you will fill out the information about the asset you wish to borrow. Enter the crypto you want to borrow and the collateral asset. The collateral amount is automatically filled when you enter the amount you want to borrow. Then, select between 7-180 days.

4. View hourly interest rate based on the collateral amount

The Binance platform will automatically determine the hourly interest rate based on the collateral amount. Again, the interest rate is determined by the time you make the loan, and any time that is less than one hour is calculated as one hour.

5. Use your funds

You can use your borrowed funds anywhere within and outside the Binance ecosystem. In other words, you can use it to make payments or withdraw it out of Binance.

6. Repay your loan

Visit the Order section, under Loans, to repay your loan. You will pay the interest fee first and then the principal amount. If the payment is ahead of the scheduled period of repayment, the interest will be charged by how long you borrowed, and you won’t receive any penalty for paying early.

Binance offers an overdue duration of 7 days for loan terms of 30, 90, and 180 days, and 72 hours for loan terms of 7 and 14 days. This overdue duration is designed to offer relief for borrowers that can’t repay their loans within the agreed period.

Get a Binance Loan Today

Borrowing cryptocurrencies from Binance is simpler than borrowing from a traditional financial institution. You don’t need to wait in line to fill out unnecessary paperwork, and your credit score is not important. Also, you can borrow a Binance crypto loan for as short as 7 days or 180 days. You can borrow up to 65% of your collateral value, and there is a chance of your collateral appreciating before the loan is due for repayment.