VDA Loan


Have you ever been denied a loan based on past lending history? Are you new to lending and borrowing and are not deemed capable of repayment? Thanks to online exchanges, it has never been easier to secure a cryptocurrency loan.

Centralized finance has historically relied on arbitrary metrics to decide who can receive a loan and who has to build up credit history before being able to prove they can be trusted. Cryptocurrency and crypto lenders are not concerned with your history, as there are clear, transparent understandings on repayment and borrowing rates.

    A crypto loan, much like a securities-based loan, such as an auto-loan or mortgage, uses your personal digital currency as collateral when borrowing money. Your digital assets are then restricted from being traded or being used for transactions before you have repaid the borrowed money.

    There are many benefits to using crypto lending as opposed to traditional, centralized financial lending, such as low interest rates, not needing a credit check to access modern financing. Funding through crypto loans is quick when compared to security-based loans. Interest rates are often a deterrent when considering taking out a centralized loan, or using a credit card to make a significant purchase.

    According to the Federal Reserve, the average credit card in the first quarter of 2021 had an interest rate of 15.91%. Often your credit score is used to determine what interest rates are applied to loans.

    However, when using crypto lending platforms, the borrowing rate is usually in the single digits, regardless of credit score or past lending situation. The average borrowing rate of Bitcoin (BTC) for example, was about 5% in August 2021.

    Crypto lending platforms typically process your loan request within the same business day, rather than the lengthy step-by-step process at a bank to secure a traditional loan.

  • Binance - One of the Best Crypto Lending Platforms
  • Binance, the world’s largest crypto exchange, not only allows you to buy & sell virtual assets in seconds, but also to both finance and stake your cryptocurrency. Binance prides itself on being a secure, fast, and elegant solution, attempting to provide monetary freedom across the globe.

    Please check out our Binance staking guide to understand different modes available for staking and saving cryptocurrencies.

    Over the last few months, Binance has made massive improvements to its customer support system. During this time period, the active user base of Binance has increased ten-fold, with a positive correlation in customer support requests. This improvement was made possible by creating an in-house customer support service, allowing Binance to properly track support results based on team performance and assigning agents to assist you based on their expertise within Binance and the broader crypto loaning ecosystem.

  • How to Borrow and Repay Crypto Loans on Binance
  • Borrowing Crypto Loans on Binance

    Receiving a crypto loan through Binance is easy. While logged in on the official Binance webpage, click “Finance” followed by “Crypto Loans'', then select the asset you wish to borrow, the collateral asset, and loan term. Once all of your information has been confirmed, select “Start Borrowing Now”.

    Once you have completed this step, you will be asked to confirm your information. It is recommended to read the Binance Loans Service Agreement to ensure you understand the agreement and your responsibility to repay the loan.

    The collateral will be removed from your spot account, and the received loan will be replaced with your loan amount. You are now free to withdraw your stablecoin to your bank account or financial institution of choice. The interest rate is charged on an hourly basis, and the loan can be repaid at any time.

    How to Repay Crypto Loans on Binance

    To pay off your crypto loan balance, simply select “Ongoing Orders” then “Repay” to first repay the interest of the loan, followed by the principal.

    You can either enter the repayment amount manually, or select a repayment ratio. After reviewing and double checking the details, click “Confirm Repayment” to settle the loan. You will receive a confirmation message after your repayment processing has been completed.

    What is the Transaction Fee for Binance Crypto Loans?

    By depositing or securing a collateral amount of crypto within your trading account, you are able to borrow USDT or BUSD through the Binance Loans platform. These stablecoins can then be removed from your account and used as you wish.

    The amount you are able to borrow is based on your LTV (Loan-to Value) ratio. Taking the desired loan value and dividing it by your collateral value determines the amount you are able to borrow, and loans are fixed at 65% LTV. Interest is calculated hourly, and the loan can be repaid at any time.

    Crypto Loans Without Collateral - Is That Possible?

    As of 2019, Binance Margin has been enabled on the main Binance exchange platform. By enabling Binance Margin, a third party, Binance, will allow you to amplify your gains on successful trades, but this comes at the cost of multiplied losses.

    As opposed to Binance Loans, using margin allows you to use your initial crypto value in a trade, rather than as collateral for access to additional funds. To avoid a “margin call”, or a forced liquidation of assets to cover the lender’s investment, your trade must retain a value that does not go below your initial investment of the margin trade. This is often done in low-volatility markets to prevent margin calls from occurring unexpectedly.

    Other Crypto Lending Platforms Besides Binance

    While Binance has many benefits to its lending and margin programs, other platforms are also available to solicit crypto loans for short term or long term needs.

    For those in the US who are not able to access Binance or prefer an alternative to Binance.US, Coinbase is a trusted platform to access crypto lending services. Known for its reputation and ease of use, Coinbase was created in 2012 to be a user-friendly option to first time and intermediate traders. Being based in the US, it emphasizes its adherence to regulations and banking transparency.

    If you want a non-bank lending service that offers competitive interest rates for savings accounts as well, DeFiRate may be your preferred choice to review and compare the lending services of various DeFi protocols, helping you to identify the most generous monthly interest rates for parking your cryptocurrency in long term accounts.

  • Conclusion
  • Crypto lending services have many advantages over centralized finance lending services, including accessibility, transparency, or ease of use. With more and more DeFi-powered lending services and platforms becoming available regardless of your financial situation or geographical location, crypto lending is becoming more and more popular. It will only improve in popularity as DeFi apps and platforms become more connected and streamlined with their lending capabilities.

Feel free to contact us

Do You Have Any Questions?

Binance Crypto Loans offers a wide range of crypto as loanable assets and collateral, including BUSD, USDT, BTC, and ETH. Check out the Loan Data page for more information.

Loan terms are available from 7, 14, 30, 90, and 180 days. You can always repay in advance and the interest is calculated based on the hours borrowed. There is no penalty for early repayment.

Interest is calculated hourly, in which less than one hour is calculated as one hour. The interest rate starts to accrue at the time of borrowing.

LTV stands for Loan-to-Value. It's the total value of your loan plus interest, if any, to the value of your collateral. The value is determined by the index price.

LTV = Loan Value / Collateral Value

We give an overdue duration of 72 hours (for loan terms of 7 and 14 days) or 168 hours (for loan terms of 30, 90, and 180 days), during which you will be charged 3 times the hourly interest. If you do not repay after the overdue duration, we will liquidate your collateral to repay your loan.

You can use the loan for any purpose, including trading on the spot, margin, or futures markets, staking, or even withdrawing the funds.

Loan staking supports collateral with a [Staking] logo. Loan staking generates profit to reduce the interest for the loan order by staking the collateral. The profit from staking will fluctuate and be adjusted over time. However, all loan orders that participate in staking will be calculated based on the profit and the interest rate displayed at the time of borrowing. Binance strives to offer only the best staking projects.

Please note that Binance does not assume liability for any losses incurred due to the project’s on-chain contract security issues. Please read carefully and agree to the Binance Loan Service Agreement before you use Binance Loans.

Yes. No matter which token you have borrowed (e.g. Bitcoin, Ethereum), you can renew the loan order within 24 hours before the due date. Please note that 180-day orders and loan staking orders cannot be renewed, and every loan order can only be renewed once.

The Auto Top-up function helps you better manage your loan positions by automatically transferring the equivalent collateral assets to loan orders from your Spot Wallet to maintain the initial LTV ratio during a margin call or liquidation call.

When your LTV reaches the Margin Call or Liquidation LTV, the available assets in the spot wallet will be automatically and immediately used to supplement the collateral, until your LTV reaches initial LTV or no available assets in your spot wallet.

Please note that there's still a chance that your spot wallet available assets are not sufficient and can be liquidated even after auto top-up. Users should always be aware of the risk and adjust your positions. All of your collateral and available spot assets may be liquidated in the event of extreme price movements.

You should always be aware of loan risk and adjust your positions, if any, in time to minimize that risk.

To enable Auto Top-up, go to the [Asset Overview] tab and toggle on the [Auto Top-Up] button in the upper right corner.

"Partial Liquidation" helps users reduce liquidation risk and lower their possible losses. When the liquidation LTV is reached, your positions will be partially liquidated (~50% each time) until your LTV returns to the initial level. When the remaining loan balance equals or less than 200 USD, your position will be fully liquidated. Please note that in extreme market conditions, your positions may still be fully liquidated.