Have you ever found yourself in need of something you think will add value to you but with no way to get it? It can be really frustrating especially when you find yourself in such a helpless scenario without any solution.

Many traders who need a crypto loan find themselves in such situations. Sometimes traders need loans to take advantage of a trading opportunity or to save a leverage trade close to being liquidated or even to pay for bills when they can't take profit from their portfolio due to a market down trend.  A solution to this problem is BINANCE CRYPTO LOANS.

What are Binance Crypto Loans?

Binance Crypto loan is a financial service that helps the users on the Binance platform to meet their short-term liquidity needs by providing them with crypto loans. Crypto Loans accessible to subscribers range from $100 to $10,000. Find below coins that can currently be borrowed and used as collateral.

Why do we use Crypto Loans?

• Crypto loans can be used to save leverage traders close to liquidation and require to add more margin to their positions.
• It can also help traders with limited funds to add to their trading funds while using their HODLed crypto as collateral.
• Crypto loans can serve as a needed help for traders who are hodlers of crypto projects that do not want to sell, but still desire to trade in order to yield turnovers.

Take for example:

A Binancian who HODL BTC needs a working loan to trade and earn a turnover but he only has 1 BTC in his portfolio and doesn’t want to sell. What can he do? He can borrow a loan from Binance to trade and use his 1 BTC as collateral to take it back after repayment of the borrowed loan. Binance approves the loan for him on agreed terms, hence his need has been catered for.

• Crypto loans can used to settle utility bills or debts pending when you can make a repayment within the loan repayment period, which can be in 7 days and up to 180 days depending on the selected loan period agreement.

Consider another reason:

Alex needs funds to clear some utility bills. He is broke without any reserve funds. He looks into your portfolio to take out some profits to clear-off his bills but the crypto market is down and he is in a loss. What can he do? He can borrow a loan from Binance to clear his bills and deposit his "crypto in loss" as collateral. If Alex's crypto is stakable; it will yield a cumulative interest during the loan time period. He can take back his crypto used as collateral after repayment of the borrowed loan and If the crypto he used is stakable; the staking rewards can help to offset part of the loan interest he will pay on his loan. When Binance approves the loan to him on the agreed terms, he can use it to settle his bills and repay when he is in profits again or when he has funds to pay back.

How to use Crypto Loans

Requesting a Crypto Loan on the Binance Crypto loan interface is very easy. It only takes a few clicks and your done! Lets take a look at Alex scenario.

Alex needs a Loan of $100 to pay his over-due electricity bills. How can he do it?

Alex remembers he owns 1 BNB in his portfolio valued at $200 because the market is down and value of BNB has dropped. Alex decides that he can't sell at a 200% loss since he bought BNB at $400. He opts to use a Crypto Loan.

How can he use his Binance APP to access the Crypto Loan?

Alex navigates his Binance App; he goes to home window and clicks to use the Earn service and selects Crypto Loans.

Next, he uses the default option Borrow. He inputs 100 BUSD in the I want to Borrow column. He selects BNB in the Collateral Amount; and it auto calculates he will pay 0.26765792 BNB as shown in the picture. He has 1 BNB in his portfolio which will cover the collateral Amount. He now needs to select the Loan Term Period; he selects 180 days to be on the safe side owing to the market volatility; knowing that definitely the price of BNB will pump back above his entry price and soon be in profits before the next 180 days.

What will the interest rate be?

As seen in the picture, the hourly interest amount is auto-calculated to be 0.001667% of borrowed amount and a daily interest of 0.0400%. For the next 180 days; it will be a total interest of 7.240144 BUSD and his Total Repayment Amount is 107.20144 BUSD.  

Alex goes ahead to click Start Borrowing Now. He completes the loan borrowing process by clicking Confirm after reading and agreeing to the Binance Loans service agreement. 

Alex can repay the loan anytime before the 180 days and no interest penalty will be charged. If the price of BNB pumps before then; he can repay using his collateral or he can fund his account to repay the loan.

That is how easy it is to use the crypto loan service.

Note that borrowed Crypto Loans can be used for any transaction, it can even be withdrawn if the user wants to use the crypto funds probably for a project outside Binance as long as the loan is repaid on time. The borrowed loans can be used for staking or any other Binance Earn options.

If the borrowed loan is liquidated, there is a 2% liquidation fee charged from the total borrowed amount. To avoid liquidation, pay attention to the LTV (Loan To Value) to know when to either add more to or remove from your collateral.

What is LTV?

LTV is the ratio of the borrowed loan to the collateral value. It is calculated as:

Borrowed loans attracts a minimum hourly interest of 0.00000001 BUSD based on the loan agreement and interest rate is 3x after loan repayment expiration time.

Borrowed loans are renewable if the previous loan is paid before expiration. Unpaid loans are overdue after 72 hours from expiration time and are closed for repayment.

How to Borrow loans?

Follow these simple steps:

• Go to Home,
• Click Finance (on Desktop) or Earn (on the App)

• Click Crypto Loans (Borrow),
• Select the asset you want to borrow and enter the amount,
• Select the collateral asset and enter the collateral amount,
• Choose a loan term from 7 to 180 days,
• Next confirm the borrowable amount, collateral, interest, repayment, and click Start Borrowing Now,
• Confirm all the information on the order confirmation pop-up that comes up,
• Carefully read and agree to the Binance Loans service agreement and click Confirm,
• Once it is confirmed, the collateral is transferred into the Loan account and the loan amount is received into the spot account.

How to repay borrowed loans?

Follow these simple steps:

• Go to Home,
• Click Finance (on Desktop) or Earn (on the App),
• Click Crypto Loans (Ongoing Loans),
• Click Repay or Repay with collateral if you wish to repay loan with collateral,
• Enter the repayment amount or select a repayment ratio,
• Review the details to be correct and click confirm Repayment,
• A repayment successfully processed confirmation message pops up.

Binance Crypto loans can be repaid at any time before the expiration of the loan period or at the loan expiration period or within the 72 hours grace period after the expiration period. Once the loan is repaid, the collateral is received back into the spot account.

Do you HODL any crypto and would like to take advantage of a Binance crypto loan to earn passive income?

Here is how to get started with these simple steps:

First you would need to  create a verified Binance account  by clicking here, and then complete the KYC process.

If you already have a KYCed Binance account that you currently trade crypto with; simply click on the link: https://www.binance.com/en/loan?ref=65177765

Follow the steps highlighted in this article to borrow a crypto loan and remember to repay your borrowed loan on time.

The thoughts in this article are clearly my personal opinion and should not be viewed as financial advice.

If you need more details or an answer to any question you may have about using Binance Crypto loans; simply access the frequently asked questions on Binance.

For other Crypto related investment opportunities and Educational contents, peruse my crypto articles archive here.