What Is Binance VIP Loan and Frequently Asked Questions
2022-01-18 12:39
Last updated: 29 April 2024
What is Binance VIP Loan?
Binance VIP Loan is a large personal or institutional over-collateralized loan service with competitive rates, terms, and services. It offers customized margin call processes and better utilization of collaterals in the account.
You can use Binance VIP Loan to unlock greater potential in objectives, such as enhanced liquidity for long-term investment funds, leveraged trading, and hedging strategies.
What are the advantages of the Binance VIP Loan Program?
Institutional-level capital efficiency
No hard cap with good credit history;
Enhanced Loan-to-Value Ratio (LTV), where Initial/Margin Call/Liquidation LTV are improved to 72%/77%/91%, respectively.
Full freedom to use loan proceeds and collateral assets
Loan proceeds can be used for any purpose, including trading on Spot, Margin, or Futures markets, Earn subscriptions, and withdrawals;
Collateral assets can also be traded on the Spot market if LTVs remain below margin call levels. Note that only tokens that have been designated as collateral tokens are included in LTV calculations.
Increased flexibility with bespoke loan service
We support 600+ coins as loanable assets and collateral;
Flexible loan terms without penalty for early repayment;
Possible delayed liquidation when the liquidation LTV is triggered.
Reduced total cost
Competitive interest rates;
No transaction fees.
Risk Warning: Digital asset prices are subject to high market risk and price volatility. The value of your investment may go down or up, and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. Past performance is not a reliable predictor of future performance. You should only invest in products you are familiar with and where you understand the risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.
Disclaimer: This document may have been translated and published in different languages. In the event of any inconsistency, misstatements, omissions, or errors appearing in any translated version, the English version shall prevail.
Introducing Binance VIP Loan self-service function
Binance VIP Loan now offers various new features tailored for VIP users, such as online self-service loan applications, renewals, and newly supported SAPI functions. You can apply for and renew Binance VIP Loan products at any time through the new VIP Loan platform.
These new features offer a convenient and automated solution for VIP users seeking loans using their cryptocurrency holdings as collateral. You can easily keep track of loan details, such as interest payments and loan terms. The feature also displays interest amounts accrued for each token borrowed and highlights tokens in the Spot Wallet red if there’s insufficient balances to perform interest payments.
Users can select between open-term, 30-day and 60-day loan terms and either Flexible or Fixed Rates for their VIP Loans, view upcoming renewal dates and see their available loan amounts. Please note that renewals are unavailable for tokens that have surpassed their predetermined borrow limits.
Real-time updates of borrow interest rates are displayed to ensure borrowers remain informed. Collateral details, including total collateral value, accounts, assets, and borrower loan accounts are also displayed. Most importantly, initial collateral, margin call, and liquidation levels are displayed to help borrowers manage their loan positions effectively. Confirmations for loan renewals are only allowed when your Spot Wallet has sufficient funds to cover the interest payment.
1. How to submit a self-service VIP Loan request?
1. Log in to your Binance account and go to [More] - [VIP Loan].
2. Click [Apply Now] to access the request page. Input your Receive Account, choose a loan term, and select either Flexible or Fixed Rates. Note that Fixed Rates can be selected for 30- and 60-day VIP Loans only, while Flexible Rates can be selected for all loan terms in VIP Loan.
Please note for Borrow Limit: The minimum borrow amount for the first VIP Loan order is equivalent to $500,000, and the minimum borrow amount for any following VIP Loan orders is $50,000.
Next, enter your desired borrowing amount and select collateral assets. You can also provide additional information in the [Option Info] table for your VIP account manager.
3. After submitting a request, review the order details in the [Loan Term Sheet] and click [Confirm]. If you are a new VIP Loan user, ensure you accept the Terms of Use. Please make sure the collateral account balance meet the minimum LTV requirement 72% before placing the order.
2. How to repay my loan order?
1. Find the order you wish to repay and click [Repay].
2. Input the repayment amount or choose the loan order percentage you wish to repay. Click [Confirm] to complete repayment.
3. How to renew my loan order?
1. Find the loan you want to renew on the order detail page and click [Renew]. Only fixed-term loans (i.e., 30- and 60-day VIP Loans) can be renewed, as open-term loans do not have expiry dates.
2. Complete the interest repayment and click [Next] to proceed to the order renewal page.
3. Make sure your order details are accurate. Click [Confirm] to complete the order renewal.
4. How to view my VIP Loan history?
1. Log in to your Binance account and go to [Orders] - [Loan History].
Alternatively, select [Finance] on the main menu bar and click [Crypto Loans] - [Active Loan].
2. You can search for your VIP [Loan History], [Repayment History], and [Liquidation History] in the respective menus.
5. Frequently asked questions about self-service VIP Loan
1. Can I use the same receiving account to add a new loan order if I already have one or more existing loan orders?
Yes, you can use the same receiving account for a new loan order. However, do ensure that any existing orders are not in margin call status, and that there is enough collateral for the new order. If you wish to change the receiving account, please select collateral account(s) that are not already being used by other receiving accounts.
2. Why is my Spot Wallet balance displayed in red for a specific token?
The Spot Wallet balance for specific tokens appears in red when it is insufficient to cover loan interest. Please ensure you have enough funds in your Spot Wallet to pay the interest.
3. How long is the loan term and when can I renew the loan?
The loan term can be set as either open-term, 30 days or 60 days. You can renew a fixed-term loan order any time within seven days (UTC 00:00) before that loan is due. Open-term loans do not have expiry dates and therefore do not need to be renewed.
4. What is the difference between Flexible Rates and Fixed Rates?
Fixed Rates do not fluctuate throughout the tenure of fixed-term loans. A new Fixed Rate will apply after an expired Fixed Rate loan is renewed for another fixed-term. Fixed Rates will vary across different VIP levels, and are only available for 30- and 60-day VIP Loans.
Flexible Rates fluctuate daily depending on market conditions, and do not vary across different VIP levels. Flexible Rate loans are available for both fixed-term and open-term loans.
5. Can I apply for a VIP Loan with a sub-account?
Only master accounts can be used to apply for VIP loans.
6. Why can’t I confirm the loan renewal?
There are two possible reasons why you are unable to confirm a loan renewal. Firstly, renewals are unavailable for tokens that have surpassed their predetermined borrow limits. Secondly, if your order is currently in a margin call status, you will not be able to renew that order.
7. Why am I seeing a message saying ‘the current collateral account has been used’?
Each collateral account can only be used to provide collateral for one receiving account, while one receiving account can be collateralized using multiple collateral accounts. This error message means that you have selected one or more collateral accounts that are currently being used for other receiving accounts. Remove these collateral accounts and try again.
9. Can I switch between Flexible and Fixed Rate VIP Loans?
To switch between Flexible and Fixed Rate VIP Loans, you must first perform a full repayment of the existing loan order and create a new order with the desired interest rate type.
Binance VIP Loans offer the widest range of borrowing options with multiple collaterals, greater borrowing sizes, and more flexible terms.
You also have the flexibility to trade your collateral assets on the Spot, Margin, or Futures markets. However, please note that only qualified assets (tokens that can be collateralized) in the Spot Wallets of your collateral accounts can be considered as collateral. Please be advised that while you are free to perform Spot trades with your collateral, converting them into non-collateral assets will increase your Loan-to-Value ratio, which may result in immediate liquidation. For an updated list of the accepted collateral tokens, please contact our VIP manager.
2. What are the requirements for using VIP Loans?
All functions and privileges are available to Binance VIP users. If you are not a Binance VIP user and are interested in using VIP Loans, please contact our VIP manager with details of your request and your Binance UID. The amount of your first VIP Loan order should be greater than or equal to $500,000 and the collateral account balance meet the minimum LTV of 72%.
3. How does the settlement work?
Settlement will usually occur immediately after the loan is approved. Loans are settled directly to your designated Binance account’s Spot Wallet.
4. Are there any fees?
There are no transaction fees for VIP Loans. However, you will be responsible for the loan interest generated and a 2% liquidation fee in case of a liquidation.
5. How is interest calculated?
The interests of VIP Loan flexible rate is calculated and accrued every hour while the interests of VIP Loan stable rate is calculated and accrued daily. The accumulated interests will be updated daily between 00:00 and 01:00 (UTC). If your loan is overdue, a triple daily interest will be charged. You will be liquidated if you fail to repay the loan after the overdue period.
6. What are the LTV (Loan-To-Value) ratios for VIP Loans?
The Loan-To-Value ratio helps determine the amount of loans you will receive based on your existing collateralized assets. You may manage your LTV by transferring assets to/from your Spot Wallet.
VIP Loans offer a greater Loan-To-Value ratio. VIP Loans generally have greater initial, margin call, and liquidation LTVs at 72%/77%/91%, respectively. Please contact our VIP team to learn more.
7. How to repay VIP Loans?
You may repay your outstanding interests and principal (partially or in full) using funds from your Fiat and Spot Wallet balance in the same token you borrowed.
To repay, go to [More] - [VIP Loan] or [Binance Loans] - [Loan Orders]. Click [Repay] next to the loan order to input your repayment request.
8. Where can I find the relevant API to read my LTV levels or repay my loans?
You may refer to the Binance API documentation to find the relevant APIs to perform these functions, or more specifically:
9. What happens during a margin call or liquidation?
A margin call is issued when a loan position reaches its margin call LTV. This margin call LTV represents a warning that the loan position is getting close to the liquidation LTV. You can pledge more qualified assets to increase the collateral value or repay the outstanding loan partially to lower the LTV.
A liquidation happens when a loan’s LTV reaches or exceeds the liquidation LTV. By default, Binance will liquidate any outstanding loan using the available collateral assets. However, users registered in the Delayed Liquidation service will be granted an additional liquidation call grace period that lasts for 24 hours. During this time, you may make any necessary adjustments, such as adding collateral or repaying your loan partially to lower your LTV to the Initial LTV level. If the loan LTV exceeds 95%, we will proceed with liquidation immediately. Please contact your VIP manager to learn more about the Delayed Liquidation service.
You’ll be notified via in-mail, email, and SMS in the event of a margin call or liquidation. The notifications serve as a risk warning and cannot guarantee timely delivery.
By using the service, you agree that under certain circumstances, you may be unable to receive or get delayed SMS or email reminders. These circumstances include but are not limited to personal network congestion, poor network environment, local restrictions, service provider's policies, and device malfunctions.
Please note that if the margin and liquidation calls are too close, the system will automatically cancel the margin call notification and you’ll only receive the liquidation notification. Binance reserves the right with no obligation to deliver notifications.
10. Can I transfer any assets from my collateral accounts?
Only qualified assets in the Spot Wallets of your collateral accounts can be used as collateral. Subject to the following conditions, you may perform certain transfers and transactions:
If your LTV is below the margin call and liquidation LTVs, you may transfer collateral and non-collateral assets between the Spot Wallets of your collateral accounts or perform trades using these assets in the Spot market.
If your LTV is below the initial LTV, you can transfer collateral assets into other Wallets (such as Funding or Margin Wallets) or withdraw them as long as the LTV remains below the initial LTV.
You are also able to remove any collateral account from the loan order group it belongs by reaching out to your VIP manager, subject to the following conditions:
The LTV for that loan order group is currently below the initial LTV level.
The cancellation instruction does not result in the LTV of the loan order group rising above the initial LTV level.
11. What is the VIP Loan Collateral Ratio?
Haircuts to the value of collateral assets may apply at different tier amounts for each asset. A haircut refers to the percentage difference between an asset's market value and the amount that can be used as collateral for a loan. A 75% collateral ratio on a particular asset means that 75% of the market value of that asset is used as collateral, effectively having a 25% haircut. For example:
Token A has a 100% collateral ratio for amounts up to 1 million USD equivalent value and an 80% collateral ratio for amounts higher than 1 million USD equivalent value.
Assuming the 5 million USD equivalent value of Token A is collateralized, the recognized collateral value can be calculated as 1,000,000 * 100% + (4,000,000) * 80% = 4,200,000 USD
The VIP Loan Collateral Ratio mechanism allows Binance VIP Loan to offer more collateral tokens that are less liquid. Such tokens carry a higher probable cost of liquidation due to the impact of liquidation on market price, especially for larger volumes associated with Binance VIP Loan. Applying Collateral Ratio on collateral assets mitigates this risk by applying haircuts on the market value of collateral assets.
The size of the haircut is largely based on the liquidity of the underlying asset. Less liquid assets receive larger haircuts. Binance reserves the right to amend Collateral Ratios applied to collateral assets at any time. Please refer to the VIP Loan page for the latest Collateral Ratios.
