About Fixed Rate Loans
Frequently Asked Questions
About Fixed Rate Loans
Last updated: 5 Sep 2024
Binance Fixed Rate Loans is a fixed-interest rate and fixed-term loan service. Each loan order is over-collateralized (i.e., the value of the collateral pledged by the borrowing user, the “Borrower”, is higher than the value of the digital assets lent by the lending user, the “Supplier”.)
Borrowers can choose a variety of tokens to be used as their collateral, and can select the loan’s interest rate, duration and amount based on their preferences.
If you would like to lend digital assets instead of borrowing, you can receive a fixed deposit rate by lending your stablecoin assets to Binance, setting the expected rate of return, loan duration, and the amount of digital assets to be loaned, based on your own chosen requirements. Your loaned assets are principal protected by Binance (in token amount).
Before using this service, users should carefully read and agree to the Binance Fixed Rate Loans Terms. Please note that in the event of any discrepancy between this FAQ and the Binance Fixed Rate Loans Terms, the provisions of the Binance Fixed Rate Loans Terms will prevail with respect to the same.
Advantages of using Binance Fixed Rate Loans
1. Stable and predictable costs for borrowers: Lock in a fixed APR for a set duration, eliminating fluctuations and unexpected costs.
2. Attractive fixed APR for suppliers: Supply your assets for a customizable and fixed APR.
3. Multi-asset collateral: Borrowers can select multiple assets as collateral to reduce the risk of liquidation.
4. Efficient automated process: Enjoy a fast, easy, and automated borrowing and lending experience with auto-repay and auto-renew options available.
5. Trusted management: Binance directly manages collateral and loaned assets, providing a secure and reliable environment. The Supplier’s loaned assets are principal protected by Binance (in token amount).
What are the risks?
The collateral of the Borrower and the supply loan assets of the Supplier will be frozen after the Borrow and Supply orders are placed. Loan Interest will only be generated after the orders are matched and will not be charged until matching. The Supplier cannot redeem the returned funds or interest accrued on the loan (“Return Interest”) before expiry of the loan. Users’ digital assets are subject to market risk and price volatility. Binance protects users' assets through strict risk control mechanisms and advanced security technologies.
Please note: Binance Fixed Rate Loans is a fixed-term loan service. Loan Interest is charged in advance at the time of transfer of the loan assets. The actual amount the Borrower receives is the borrowed amount minus the precalculated Loan Interest. If the Borrower repays the loan in advance or Binance liquidates the Borrower’s collateral for repayment of an overdue loan balance or when the loan LTV reaches Liquidation LTV before the loan duration expires, the amount of Loan Interest payable on the loan will remain unchanged and will not be refunded to the Borrower. Once the order is matched, the Borrower's collateral will be transferred to the Binance collateral management account. Borrowers are responsible for monitoring and adjusting the LTV (Loan-to-value). If the Borrower’s order reaches the Liquidation LTV, the system will immediately execute the forced liquidation. A liquidation fee of 2% of the borrowed amount will be charged. Binance will use the deposited collateral assets to repay the loan order. A Late Fee which is 3 times of the loan interest rate (“Late Fee”) will automatically accrue hourly where the Borrower fails to repay the loan on the agreed loan expiry date.
Late Fee calculation: interest rate of the order to be converted into interest rate per hour and multiplied by 3 to charge the fee.
How to use Binance Fixed Rate Loans
To Borrow
1. Order Placing: Place a Borrow Order or select an existing order from the Borrow Market.
2. Select Collateral: Select eligible collateral asset(s) from the list of your assets in your Spot Wallet. The Loan-to-Value (LTV) should be lower than the Initial LTV.
3. Confirm Order: Confirm the order details, including the estimated loan interest, loan duration, Margin Call LTV, etc. Your collateral assets will be automatically frozen in your Spot Wallet once the order is placed.
4. Order Matched: Once the order is matched, your collateral assets will be automatically transferred out of your Spot Wallet and held by Binance until the loan is repaid in full. You will receive the borrowed assets minus the pre-agreed Loan Interest amount in your spot wallet.
Please monitor the LTV closely to avoid liquidation.
5. Repayment: Repay the loan in full on or before the expiry date to avoid the Late Fee.
Please note: The Initial/Margin Call/Liquidation LTV of Fixed Rate Loan is 72%/77%/91% respectively. And a Late Fee will be automatically incurred hourly where the loan order is not repaid in full before the expiry date. Where the loan order is not repaid in full 24 hours following the expiry date, the collateral assets will be automatically liquidated to repay the loan order.
Late Fee calculation: interest rate of the order to be converted into interest rate per hour and multiplied by 3 to charge the fee.
Please note: The Initial/Margin Call/Liquidation LTV of Fixed Rate Loan is 72%/77%/91% respectively. And a Late Fee will be automatically incurred hourly where the loan order is not repaid in full before the expiry date. Where the loan order is not repaid in full 24 hours following the expiry date, the collateral assets will be automatically liquidated to repay the loan order.
Late Fee calculation: interest rate of the order to be converted into interest rate per hour and multiplied by 3 to charge the fee.
To Supply
1. Order Placing: Place a Supply Order or select an existing order from the Supply Market.
2. Confirm Order: Confirm the order details, including the supply amount, supply duration, estimated Return Interest, etc. Your supply assets will be frozen in your spot wallet once the order is placed. No Return Interest will accrue before the order is matched.
3. Order Matched: Once the order is matched, your supply assets will be transferred from your spot wallet and will be principal-protected by Binance for the duration of the order. Return Interest starts accruing on matching.
4. Repayment: After the loan expires, your loaned assets and Return Interest will be delivered to your Spot Wallet within 24 hours following the expiry date.
To learn more, click to view the "Frequently Asked Questions" tab on this page.
Disclaimer: In compliance with MiCA requirements, from 2024-06-30, unauthorized stablecoins are subject to certain restrictions for EEA users. For more information, please click here.
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.
1. Functions Related
1. What types of loans does Binance Fixed Rate Loans support?
Currently, Binance Fixed Rate Loans only supports stablecoins with 30-day fixed terms. Please refer to the product page for the latest information.
2. What are the terms and conditions of Binance Fixed Rate Loans?
Please refer to the Binance Fixed Rate Loans Terms and Conditions.
3. Does Binance Fixed Rate Loans charge fees?
Upon matching, the interest payable on the loan by the Borrower under the Binance Fixed Rate Loans service will include as an aggregate figure, the cost of funding and the funding for Binance insurance funds, as determined by Binance in its absolute discretion, based on a number of factors which may include, but is not limited to, prevailing market conditions such as the “Charge Fees” or the “Loan Interest”.
4. What are the differences between Fixed Rate Loans, Flexible Loans and VIP Loan?
Binance provides a variety of loan services including Fixed Rate Loans, Flexible Loans and VIP Loan to meet the demands and scenarios of different users. For details of Flexible Loans and VIP Loan, please refer to Flexible Loans FAQ and VIP Loan FAQ.
| Product | Fixed Rate Loans | Flexible Loans | VIP Loan |
| Duration | Fixed term | Flexible term | Fixed and Flexible terms |
| Interest rate | Selectable rates | Predetermined rates | Predetermined rates |
| Collateral account | Managed by Binance | Locked in your Simple Earn Account | In your Spot Account |
| Collateral asset(s) per order | Multiple collateral assets supported | Select single collateral asset | Multiple collateral assets supported |
| Minimum borrow amount | $50,000 equivalent of stablecoins | $1 equivalent of coins | $500,000 equivalent of coins |
| Subaccount supported | Yes | No | Yes |
| Advantage | Fixed rate and duration, predictable costs | Borrow and repay anytime, collateral assets accrue rewards in Simple Earn | Collateral assets are kept in your Spot Account, providing flexibility of fund usage, higher borrow limit |
5. What are the Borrow/Supply interest rates?
You can set the interest rates of the borrow / supply order according to your needs.
6. Is there a borrow or supply limit per order?
Yes, currently the minimum amount per borrow or supply order is $50,000 equivalent of stablecoins. The maximum borrow amount per user is subject to the amount of the Borrower’s collateral value and the borrow cap of different coins in Fixed Rate Loans.
The maximum supply amount per user is subject to the Supplier’s available assets in the spot wallet and the supply cap of different coins in Fixed Rate Loans. Please refer to the product page for the latest information.
7. Can I modify or cancel my orders after they have been placed?
If your order has already been matched, it cannot be edited or canceled. However, if your order hasn't been matched, you can still edit or cancel your order from Loan > Pending Orders.
Please note that if you use the split order feature for your supply order, you cannot edit the split orders that are matched already. Unmatched parts of the order can still be edited or canceled.
2. Borrower Related
1. What can I do with the cryptocurrencies borrowed from Binance Fixed Rate Loans?
There is no limitation on the purpose of the loan. You may trade on the spot market, deposit them into Binance Earn products, or withdraw them from Binance.
2. How is the Loan Interest calculated?
The Loan Interest is calculated according to the following formula:
Loan Interest = Borrowing Amount * matching interest rate (inclusive of the Fixed Rate Loan charge fees)* Fixed Duration / 365
Please note: Binance Fixed Rate Loans is a fixed-term loan. Loan Interest charged in advance at the time of fund transfer. The actual amount the Borrower receives is the borrowed amount minus the precalculated Loan Interest. If the Borrower repays the loan in advance or Binance liquidates the Borrower’s collateral for repayment of an overdue loan balance or when the loan LTV reaches the Liquidation LTV before the order expires, the payable Loan Interest amount will remain unchanged and will not be refunded.
3. Where are my collateral assets?
Once the order is placed, your collateral assets will be automatically frozen in your Spot Wallet. After the order is matched, your collateral assets will be automatically transferred out of your Spot Wallet and held by Binance until the loan is repaid in full.
4. What happens if my loan repayment is overdue?
The Borrower has to repay the loan in full before the expiry date. The Late Fee will be automatically incurred, accruing on an hourly basis for the duration of the 24 hour grace period following the expiry date, where the loan order is not repaid in full before the expiry date. Where the loan order is not repaid in full 24 hours following the expiry date, the collateral assets will be automatically liquidated to repay the loan order and the Late Fee.
5. Which cryptocurrencies can I pledge as collateral on Binance Fixed Rate Loans?
Please refer to the available collateral list on the product page. Please note that Collateral ratio applies to different collateral assets depending on the respective asset(s) market liquidity.
6. What is Collateral ratio?
Collateral ratio represents the value of your collateral pledged after being calculated based on the market volatility discount rate. Please refer to the product page for the latest Collateral ratio.
Example:
Collateral asset | Tiers (value in USD) | Collateral ratio |
A | 0 - 300,000 | 100.00% |
300,000 - 500,000 | 70% | |
500,000 - 1,000,000 | 30% | |
1,000,000 - 3,000,000 | 0% |
The user has 2,000,000 "A" coins, token price = $0.6. The following is the formula for calculating effective collateral value:
Initial asset value = 2,000,000 * $0.6 = $1,200,000
Collateral value = 300,000 * 100% + (500,000 - 300,000) * 70% + (1,000,000 - 500,000) * 30% + (1,200,000 - 1,000,000) * 0% = $590,000
The collateral discount rate only affects the maximum amount you can borrow from Fixed Rate Loan. It doesn’t affect the actual value of your assets.
7. What is LTV?
LTV stands for Loan-to-Value. It’s the total value of your loan to the value of your collateral (after the collateral ratio is applied). The value is determined by the index price of respective coins.
LTV = Loan Value / Collateral Value
For example, assuming an initial LTV of 70% for ABC token: if you have pledged 1,000 ABC as collateral, you may borrow up to 700 ABC worth of crypto assets.
8. What is the Initial LTV?
Initial LTV is the initial ratio between the value of the collateral you need to provide and your borrowing amount, which is used to evaluate and control the risk of the loan.
Please note: The current Initial LTV is 72%. Borrow orders are only available for matching when the LTV is lower than the initial LTV. If the LTV of a pending order remains higher than Initial LTV for 24 hours, the system will automatically cancel your order.
9. What is Margin Call LTV?
Margin Call LTV represents a warning that the loan position is getting closer to the liquidation LTV. When your loan position reaches its margin call LTV, which is 77% at the moment, a margin call notification will be sent out. You can take action by pledging more assets to increase the collateral value thus reducing the LTV.
For example, if the Margin Call LTV is 77%, the system will remind you to top up the Collateral Asset when the Borrowing Amount/ Collateral Amount ≥ 77%.
10. What is loan liquidation, and what is the Liquidation LTV?
Loan liquidation will happen when the Borrower defaults in their obligations under the loan agreement and associated terms. In that case, Binance has the right to obtain full legal ownership of the deposited collateral.
Defaults include, but are not limited to, where the loan repayment is overdue, and the current LTV exceeds the liquidation LTV, which might happen when the collateral decreases in value.
The Liquidation LTV refers to the tipping point at which Binance will automatically liquidate the collateral assets to recover the loan and reduce the risk when the value of the collateral asset drops to a certain percentage relative to the borrowing amount.
If the order reaches the Liquidation LTV, the Liquidation LTV, which is 91% at the moment, the system will immediately execute the forced liquidation and use the collateral assets to repay the outstanding loan amount. In the event of a forced liquidation, a liquidation fee of 2% of the borrowed amount will be charged, which will be deducted from your collateral. If there is any remaining collateral after the forced liquidation, the system will transfer the remaining collateral back to your spot account.
For example, if the Liquidation LTV is 91%, when your loan value/collateral asset value exceeds 91%, the system will immediately execute the forced liquidation.
If the market is volatile and the value of the collateral becomes less than the total debt value, you are obliged to immediately repay the remaining arrears.
11. Will I be notified in the event of margin calls or liquidations?
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. You are responsible for monitoring the loan orders by yourself.
By using the service, you agree that under certain circumstances, you may be unable to receive or get delayed SMS or email reminders. The 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 call time and liquidation call time are too close, the margin call notification will be automatically canceled by the system, and you’ll only receive the liquidation call notification.
Binance reserves the right to deliver such notifications, but is under no obligation to do so and has no liability to users where such notifications are not received.
12. Can I repay the loan before the expiry date?
Binance Fixed Rate Loans is a fixed-term loan, and Loan Interest is charged in advance at the time of disbursement. The actual amount the Borrower receives is the borrowed amount minus the precalculated Loan Interest. You have the right to repay the loan early, but in the case of early repayment or the order is liquidated before maturity, Loan Interest remains fully payable and due, and will not be refunded.
13. What is the auto-repayment feature?
Where the auto-repayment feature is enabled by you, Binance will automatically transfer the repayment of the current loan order from your Spot Wallet when the term of the current loan order expires, which can help users avoid penalties for failing to repay the loan order on time.
Please note: If you do not have enough assets in your Spot Wallet to repay the loan in full, the auto-repayment will fail - partial repayment is not provided. You can disable auto-repayment at any time before your order expires.
3. Supplier Related
1. How is the Return Interest calculated? When will I receive my return?
Return Interest accrues once your supply order gets matched. Return Interest is calculated according to the following formula:
Total Interest rewards = Amount Supplied * matching interest rate* Fixed Duration/ 365
Please note that Return Interest will only start accruing once the order is matched and not before. Return Interest will be distributed along with the return of your loaned assets within 24 hours following the expiry date.
2. As a Supplier, how can I protect the safety of my assets?
Binance Fixed Rate Loans is committed to protecting the safety of users’ assets. Binance adopts platform custody and overcollateralization mechanisms. Once the LTV of the borrowed funds is higher than a certain tipping point, the collateral assets deposited in Binance’s collateral management account, will be automatically liquidated to repay the loan.
3. Can I redeem my loaned assets earlier than the expiry date? When will the assets be returned when the order expires?
Once the order gets matched, you cannot redeem the loaned assets before the expiry date or request earlier repayment. Your loaned assets along with the Return Interest will be returned to your Spot Wallet within 24 hours following the expiry date, or earlier repayment where applicable.
4. Under what circumstances will an executed order be closed early?
If the borrowed funds get repaid earlier by the Borrower or the liquidation occurs due to the high LTV, your loaned assets will be returned prior to the expiry date. The Return Interest amount remains unchanged. Return Interest and your loaned assets will be released to your Spot Wallet within 24 hours after the order ends.
5. What is the auto-renewal feature?
After the auto-renewal function is enabled, Binance will automatically create a new supply order for you based on the interest rate and deposit amount of the current order after the current supply order expires and the loaned assets are returned to you. You can disable the auto-renewal feature at any time before your order expires.
6. What is the order splitting feature?
By enabling the order splitting feature, you can split a large supply order into several sub-orders and supply separately. This will enhance the order matching rate.
Please note: Your sub-order must meet the minimum loan quantity requirement for Binance Fixed Rate Loan, i.e. each sub-order must be greater than $50,000 equivalent. After the order splitting feature is enabled, the partially matched sub-orders cannot be modified. Any unmatched sub-orders can still be modified or canceled.
For terms and conditions, please visit the Binance Fixed Rate Loans Terms page.