Why Should You Get Crypto Loan On Binance Loans
You have undoubtedly heard of cryptocurrency loans. They allow the borrower to obtain short-term liquidity and the lender to earn interest on the cryptocurrencies they already own. You may have wondered where such a loan can be taken out. In our opinion, the best platform of this kind is Binance Loans, and this is what we will focus on in today’s article. We will explain what cryptocurrency loans are and why you should use Binance, and we will present it as a real example. So, let’s get started!
What are Binance Loans?
As we all know, Binance is not just a classic cryptocurrency exchange, it’s a whole ecosystem that consists of dozens of different products. One of them is Binance Loans.
With the help of this feature, you can easily obtain short-term liquidity because it allows you to borrow funds up to 65% of the collateral value. Moreover, you can use the borrowed cryptocurrencies in any way you like (even withdraw them outside the platform).
So how do Binance loans are different from traditional ones?
Firstly, cryptocurrency exchanges do not require to check out credit score. To get a loan, you only need to pledge your assets.
Secondly, traditional loans involve a considerable amount of paperwork. Taking out a loan from Binance, on the other hand, is quick and easy – the entire process is just a few clicks away.
Thirdly, the interest rate on Binance loans is much lower than traditional financial institutions. Moreover, it is charged hourly, and the borrower is not penalized for early repayment.
Why take out a loan on Binance Loans?
Borrowing funds on Binance brings with it quite a few benefits. Here are some of them:
Flexible terms: Binance Loans have flexible terms, and you can choose the repayment term from between: 7, 14, 30, 90, or 180 days. What’s more, interest is calculated according to the loan’s actual duration (hourly) and can be paid in advance.
Early repayment option: As we mentioned earlier, with Binance Loans, there is an option to repay the loan early at no additional cost.
No restrictions: You can use the borrowed funds in any way you like, without any limits. For example, you can use them to increase your positions or even withdraw outside the platform.
Staking: You can also use some cryptocurrencies for staking directly on Binance. This way, you will generate passive income while reducing the cost of interest.
An example of using Binance Loans
If you still don’t completely understand the point of pledging cryptocurrencies to borrow cryptocurrencies, we will explain everything to you with a real-life example.
Let’s assume that Tom, a businessman, needs capital to develop his company. Admittedly, he owns 10 BTC but doesn’t want to sell them at the current market conditions. So he can use his bitcoins as colletral and get a loan, which he will then withdraw off the exchange and invest in the business. The best part is that Tom has to make a few mouse clicks.
How to get a loan on Binance Loans?
Borrowing funds on the Binance Loans platform is a very intuitive process, and everything comes down to following just three simple steps. Here they are:
Step 1: Log in to your Binance account. If you don’t already have one, you will need to create one first by clicking this link. Also, remember that you will need to pass KYC verification to take out a loan.
Step 2: At the top of the screen, hover over “Finance” and click “Crypto Loans.” Alternatively, you can click here and go straight to the appropriate place.
Step 3: Select the asset you want to borrow, the cryptocurrency you want to use as collateral, enter the loan amount, and select the repayment term. On the right-hand side, you will see all the information regarding interest, LTV, repayment amount, etc. If everything is correct, click the yellow button “Start borrowing now,” and Voilà. You have just borrowed funds from Binance!