How to get Crypto Loans from Binance
Now On Binance.com you’ll now get a loan in cryptocurrency secured by your crypto assets within the section “Earn” → “Crypto Loan”.
How does the crypto loan work?
Its quite simple. You can choose an amount to urge as a loan.
Minimum: 100.00 USD
Maximum: 1,000,000.00 USD
In order to require a loan, you would like to place an amount of cryptocurrency (es. BTC, ETH) as collateral, so as to ensure the repayment of the loan. The Collateral amount (mortgage) to use as a guarantee is adequate to the quantity requested as loan increased by the “Initial LTV” percentage (in this case 65%).
It means so as to require a loan of 10,000.00 USD you would like to possess 16,500.00 USD in cryptocurrencies (es. BTC).
The “Initial LTV” percentage depends on the cryptocurrency chosen as Collateral.
At the time of writing 65% for Bitcoin and 55% for Ethereum.
You can choose the Loan term (repayment date) for the repayment: once you are going to be obliged to repay the loan. you’ll always repay beforehand and therefore the interest is calculated supported the effective days.
At the top of the loan (or at the day of repayment), you’ll be asked to pay also interests.
Interest is calculated daily, and fewer than at some point is calculated together day. The rate of interest is decided by the date you create the loan.
In the form, you’ll see immediately calculated the quantity of interest due if you wait till the Loan term for the repayment. within the example, the interest at the expiration date is adequate to 17.08 USDT = 10,000 (loan) * 0.0244% (interest) * 7 (days).
If the worth of your collateral drop an excessive amount of , there’ll be a liquidation event. meaning that Binance will sell your collateral cryptocurrencies on the market and repay automatically the loan. you’ll revisit the residual amount of collateral that doesn’t need for repaying the loan.
The liquidation event happens when the worth expressed in BTC of the Loan + Interest due is more or equal (≥) to the Collateral BTC value multiplied for the “Liquidation LTV” (in the instance 83%).
In the example (approximation)
BTC/USDT = 6440
Liquidation event when BTC/USD drop under 5,050 calculated as follow
10017.80 (loan+interest) / ( 2.39 collateral * 83%)
The “Margin Call” is straightforward an automatic reminder sent to your email, as an alert that the collateral is near the Liquidation LTV, so you would like to extend the collateral amount if you don’t want to risk a liquidation event.
What can I do with the loan?
You can trade on Binance.com freely with your loan.
- Spot trading
- Margin trading
- Futures trading
- Withdraw (yes, you’ll also withdraw the quantity and use it outside Binance)
You can use our referral codes within the relative sections so as to require advantage of the discount in Spot/Margin and Futures trading on Binance
robertApril 22, 2021 - 9:15 am ·
how do you pay the loan back? if the value of the collateral doubles in price do you only owe the interest ?