What is Binance Flexible Loan?

Binance Flexible Loan is an isolated, overcollateralized, open-term loan product.

Image: Crypto Loans ( Hand Sketch)

Features

Open-term, Overcollateralized, Isolated margin

Interest is subject to change every minute

Interest is accrued every minute that adds to the outstanding loan amount

Currently supports 15 major tokens as collateral assets; Simple Earn Flexible Products assets are used as collateral. If desired collateral is not currently subscribed to Flexible Products, the Flexible Loan order will automatically subscribe them to Simple Earn Flexible Products

Benefits

Users can keep their loan positions indefinitely (as long as these tokens are supported by the platform, and positions are not liquidated)

Borrowed assets can be used for any purpose (trade, stake, withdrawn), as collateral assets are locked in each Loan Order

Repay outstanding loans anytime without penalties

Flexibility to add or remove collateral based on LTV health

Interest rate is typically the lowest cost option in Binance (in comparison to Margin/Stable Rate Loans)

Collateral from Simple Earn Flexible Product continues to earn Real-Time APR which increases the collateral value every minute (in some cases you get paid more APR on your collateral compared to borrow APR)

Interest rate setting is always being reviewed based on an assessment of competitiveness and other market conditions

Binance rates are comparable to the largest CeFi competitors and DeFi money markets

Note: Currently only can repay using the same cryptocurrency as the borrowed asset; repayments using collateral are currently not available but could be introduced in the future.

After the above explanations let's see some important things to be considered when borrowing a loan.

How to borrow a loan?

1. Log in to your Binance account and go to Finance then Crypto Loans.

2. Search for a coin from the filter, then click [Borrow] next to it.

3. Choose a loan type and enter the amount you wish to borrow. Then, choose collateral. The system will automatically calculate the collateral amount based on the initial LTV. You will also see the estimated hourly interest and liquidation price.

Read and agree to the Terms and Conditions and check the box next to it. Then, click [Start Borrowing].

4. You will see a pop-up confirming the loan.

What is LTV, and how much can I borrow from Binance Flexible Loan?

Depending on which cryptocurrency you wish to pledge, a different initial LTV may apply. LTV stands for Loan-to-Value. It represents the ratio between the value of the digital assets loaned to you plus accrued interest, if any, relative to the value of your collateral. These values are based on each cryptocurrency’s Price Index.

LTV = Loan Value / Collateral Value

For example, assuming an initial LTV of 65% for USDT: if you have pledged 10,000 USDT, you may borrow up to 6500 USDT worth of loanable assets. Or LTV of 65% for 1,000 USDT will be up to 650 USDT worth of loanable assets.

How do I perform loan repayments or adjust my loan LTV?

In the Ongoing Orders tab, click Repay or Adjust LTV to perform loan repayments or increase/reduce collateral respectively. You may only repay your Flexible Loan using the same cryptocurrency that you borrowed. Repayments using collateral assets are currently not supported.

Loan repayments will reduce the outstanding loan and accrued interest proportionately. For instance, you can’t choose to repay either accrued interest or outstanding loan only or in unequal proportions. You may also adjust the LTV for each loan position by increasing or reducing collateral.

1. Click Active Loan.

2. Go to Ongoing Orders then Stable Rate. Click Repay next to the order you wish to repay.

3. Select Borrowed Coin. Enter the repayment amount or select a repayment ratio. Check the box if you wish to keep the collateral in the order.

Review the details and click Confirm repayment.

4. You will see a confirmation message after the repayment has been successfully processed.

Which cryptocurrencies can you pledge or borrow on Binance Flexible Loan?

Binance Flexible Loan offers and accepts a wide range of cryptocurrencies as loanable and collateral assets, including USDT, BTC, and ETH.

Please note that same-cryptocurrency collateral-loan pairs aren’t supported on Binance Flexible Loan. For example, you can’t pledge BTC and borrow BTC within a single loan position, but you can have multiple loan positions to borrow BTC with non-BTC collateral.

The available cryptocurrencies for pledging and borrowing are updated from time to time. Please refer to the Loan Data page for more information.

What can I do with the cryptocurrencies borrowed from Binance Flexible Loan?

You may use the loan for any purpose, including trading on the spot market, depositing into Binance Earn products, or even withdrawing them from Binance. The collateral pledged will remain with Binance Flexible Loan as security for the return of the Digital Assets you’ve borrowed.

Remember to do your research because this article is only for information and not otherwise.

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Reference: https://www.binance.com/en/support/faq/what-is-binance-flexible-loan-and-frequently-asked-questions-1c9dddb774054983992b8977ae36577a

Top 3 Best Crypto Loan Platforms
A crypto loan is a loan issued by a crypto lending platform, and the service usually allows users to borrow crypto using their existing crypto holdings as collateral.
Crypto loans are changing the way people access funds. A crypto loan allows you to use your crypto as collateral to borrow money without selling your digital assets.
This is an efficient way to access liquidity while still holding onto your crypto investments.
In this article, we’ll break down the basics of crypto loans and present the top three platforms offering such services.
Top 3 Crypto Loans Providers
1. Binance
Binance is one of the world’s largest centralized exchanges. The platform provides a wide range of services which include crypto loans.
Application process
Select collateral: Choose from supported cryptos.
Specify loan details: Enter the amount you wish to borrow and the loan term.
Review terms: Check the interest rate and loan terms according to your choices.
Confirm and receive funds: Confirm the loan and the funds will be deposited in your Binance account.
Pros
Wide range of supported cryptos: Binance offers flexibility for users, supporting various digital assets for collateral, including Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB).
Flexible loan terms: Loan terms range from 7 days to 180 days, catering to both short-term and long-term borrowing needs.
Competitive interest rates: Interest rates range from 4% to 12% APR, depending on the collateral and loan term. For instance, a loan secured with BTC might have an APR of around 6% while a loan using ETH might have an APR of 7%.
High loan-to-value (LTV) ratio: You can borrow up to 65% of the value of your collateral, making it a viable option if you need significant funds.
Simple application process: The loan application is straightforward, with rapid approval times and immediate fund disbursement.

2. Aave
Aave is one of the most popular DeFi protocols, built on the Ethereum blockchain. It offers low interest rates and features including flash crypto loans.
Application process
Deposit funds: You must first deposit funds into the Aave protocol which will be added to the liquidity pool; you receive aTokens in return which accrue interest.
Borrow: Choose the asset you wish to borrow, and make sure to have enough collateral deposited to cover the loan according to the LTV ratio; select a stable or variable interest rate.
Managing loans: Regularly monitor your collateral and the health factor of your loan to avoid liquidation.
Pros
Trust and reliability: Aave has a strong track record of security and reliability.
Low-interest loans: You can get loans at competitive interest rates, and the algorithmic rate adjustment helps maintain fair and efficient markets.
Flash crypto loans: These allow you to execute complex financial strategies like arbitrage without requiring upfront capital and a fee of 0.09% is charged for flash crypto loans.
Diverse blockchain support: By supporting multiple blockchains, such as Ethereum, Avalanche, and Harmony, Aave offers you flexibility and access to lower fees, especially useful for high-frequency transactions such as flash loans.
Stable and variable interest rates: You can choose between stable and variable interest rates, which offer predictability and lower costs; for instance, ETH has a variable borrow rate of 2.5% APR, and a stable borrow rate of 4% APR.
3. Alchemix
Alchemix offers a unique self-repaying loan. The platform stakes collateral in protocols like Yield to generate returns. The return is used to pay off loans, so there is no need to make manual repayments.
Application process
Deposit collateral: You deposit collateral in the form of accepted stablecoins into the Alchemix protocol.
Borrow against collateral: Based on the collateral deposited, you can borrow up to a certain percentage of its value; for instance, if you deposit 1000 DAI, you could borrow up to 500 alUSD.
Yield generation: The deposited collateral is automatically staked in yield-generating DeFi protocols such as Yearn Finance, and the yield is used to repay the loan over time.
Automatic repayment: The yield is used to gradually reduce the outstanding loan balance and you don’t have to make manual repayments.
Redeem collateral: Once the loan is repaid, you can withdraw the original collateral.
Pros
No manual payments: You don’t have to worry about manually repaying your loan, as the yield generated from the collateral takes care of it.
No forced liquidations: The absence of forced liquidations offers peace of mind especially in volatile market conditions.
Customizable options: You can tailor your loans and yield strategies.
No interest rates on loans: The platform doesn’t charge interest rates on loans, and the concept of interest is replaced by the yield generated from the deposited collateral.

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