WHEN SHALL I USE CRYPTO LOANS?

25/01/2023

By Adache Michael

Table of contents:

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 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.

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.

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.

EXAMPLE OF USING BINANCE LOANS.

2. Also, a crypto loan can be used to receive interest on assets. You may use an asset such as BTC or ETH as collateral to acquire a loan in a stablecoin like BUSD, USDT or any other stablecoin and receive interest on your asset after repaying the loan since there’s the possibility that the collateral could be worth more than the loan itself at the time of repayment. In such a scenario, not only would the borrower have utilised the loan for meeting immediate needs, they would also get back their collateral at a higher value.

HOW TO USE BINANCE

LOANS.

How to borrow a loan?

2. Review the loan details on the Order Confirmation pop-up. Read carefully and agree to the Binance Loans Service Agreement and click [Confirm].

How to repay a loan?

2. You can enter the [Repayment Amount] directly or select a repayment ratio.

3. Review the details and click [Confirm repayment].

4. You will see a confirmation message after the repayment has been successfully processed.

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.

CLOSING THOUGHTS.

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 signup on Binance and get started on Binance Loans, click on the link below

Click the link below to follow Binance Africa on Twitter.

To join the Nigeria Binance telegram community,Click the link below.

To join the Nigeria Binance Facebook community,Click the link below.

To follow Binance Africa on instagram ,Click the link below.

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