How To Use Binance Crypto Loans (Explained For Beginners) - YouTube

Binance crypto loans affords all Binance users  the opportunity to borrow cryptocurrencies for  

a specific duration of time at  a relatively low interest rate. 

You can borrow several different cryptocurrencies  including popular coins like Bitcoin,  

Ethereum, BNB, and others, as well  as stable coins like USDT and BUSD. 

These borrowed crypto assets can be in your  possession for anywhere between 7 days and  

180 days, and in that time frame, you can trade  with the cryptocurrencies on the Binance platform  

and even withdraw the crypto assets to other  platforms or to your bank account if you wish. 

There are a number of reasons why people use  crypto loans. Basically, any situation where  

you need either crypto or stable coins and you  don't want to sell the coins that you are holding  

will be suitable for you to take a crypto loan.  For example, you might be in a situation where  

you want to make a quick trade of a particular  coin. Let's say you want to trade Ethereum  

but you don't have the liquid cash in that  moment to make your trade. At the same time,  

you might be holding a different cryptocurrency,  for example, you could be holding Doge coin  

but you don't want to sell your Doge yet for  whatever reason. In this case, you can use your  

Doge as collateral to borrow some USDT and use the  USDT to trade. When you return the borrowed money,  

you get your Doge coins back and you also  keep the profit that you made from your trade. 

To take a crypto loan on Binance is very easy.  Just log into your Binance account and click on  

"Finance" at the top here then select crypto  loans. This will take you to the loans page.  

At the top of the page here where it says  "Currently loanable", you will see the different  

coins that you can borrow and if you click on  this arrow here, you will see the full list.  

Just scroll down to explore everything. In the "I want to borrow" box,  

select the coin that you want to borrow by  clicking this arrow here and either type the  

name of the coin to see the one that you want or  scroll down the list to find the coin yourself.  

For this video, I'm going to borrow USDT. Once you have selected the coin you want, if you  

hover your mouse here you will see the minimum and  maximum amount of that coin that you can borrow.  

For example, in my case, I can borrow a minimum  of 100 USDT and a maximum of 10,000 USDT.  

Click here and enter the amount that you want.  Please note that the number you enter here must be  

within the minimum and maximum range. For example,  I can't enter 90 here because it is less than 100. 

Under collateral amount, click the arrow here and  select the coin you want to use as collateral.  

It will tell you the amount of the coin that  will be needed for the amount that you are  

borrowing. Please note that this coin has  to be in your spot wallet for this to work. 

Under loan term, select the duration  that you want to borrow the coin for.  

Let's say I want my USDT for seven days. Over  here you will see the amount of interest that  

you will be charged for the duration. In  my case, I will be charged 0.490056 USDT  

meaning that the amount of USDT I'm expected to  return at the end of my loan period is 100.490  

USDT. That is what this repayment amount means. The hourly and daily interest rate shows you  

how much you are being charged as interest per  hour and per day. This is one of the things I  

really like about Binance crypto loans. If you  return the crypto you borrowed earlier than the  

agreement date, you will be charged only for the  hours or days that you had the crypto with you.  

In my case if I don't wait for seven days and  I return the hundred USDT I borrowed after two  

hours for example, Binance will calculate  my interest for only those two hours based  

on this rate and that is what I will pay back. The loan to value ratio here is very important  

and you need to take note of  it whenever you want to borrow.  

Loan to value is the value of a loan against  the market value of its collateral and Binance  

uses it to evaluate the risk of lending that  crypto to you. Because the value of the crypto  

you used as collateral goes up and down, there  is the possibility that during the duration of  

your loan term, the value of your collateral can  drop below the value of the loan you have taken  

and this presents a financial risk. For example,  let's say I used 692 Doge coins as collateral to  

borrow 100 USDT now and let's assume the current  price of dodge is $0.24 per coin it means the  

value of my 692 dodge coins is about $166 which is  fine but let's assume sometime in the future while  

I'm still holding my borrowed USDT, the price of  Doge falls to $0.1 it means that my 692 Doge coins  

will be worth about $69 at that point which is  less than the hundred dollars that I borrowed. 

To prevent a situation like this from happening,  when the price of Doge falls to a certain extent,  

Binance will notify me with a margin call so that  I can add more collateral. If the price falls even  

more to a liquidation point, then Binance will  sell off my collateral to pay back the loan.  

Generally, the higher the loan to value  ratio, the higher the financial risk. 

Binance uses a formula to calculate this loan to  value ratio and they will display three pieces  

of information here. This is the initial loan to  value ratio at the time of lending you the crypto.  

For me, it is 60%. When the loan to value ratio  reaches 75% meaning the risk of lending me the  

crypto is now higher, Binance will notify me  and it's a good idea to add more collateral to  

your loan at this point. When the loan to value  ratio reaches 83 percent, Binance will liquidate  

my loan, meaning they will sell off the dodge  coins I used as collateral to pay back the loan. 

Binance also displays the price of my collateral  coin at which the loan will get liquidated here.  

This number means that if the price of Doge  coin falls to 0.1746979 to the USDT pair,  

my loan will be liquidated. If you don't understand anything  

about loan to value, just remember two things. If  you get a margin call, it means that you should  

add more collateral to what you have so that  your loan does not get liquidated. The second  

thing you need to remember is that if you get  liquidated, it means that your crypto collateral  

has been sold off to pay off your loan. Once you are okay with the details,  

click on "Start Borrowing Now". Review the  details of the loan you are about to take.  

Read through the loan service agreement and tick  this box if you agree. Then click on "Confirm".  

You will see a notification telling  you that the loan was successful. 

If I go to my spot wallet now, you will  see that I have been given 100 USDT  

and my Doge has been taken. Once your loan is active,  

you can go back to the loan page and click on  "All orders" to see the details of the loan.  

If you want to adjust your loan to value ratio,  that is you want to add more collateral or you  

want to remove some collateral, you can do so by  clicking "Adjust LTV" here, and then you can enter  

the amount of collateral that you want to add. To repay your loan, just click on "Repay" from  

the loan orders page and you will see the  total amount that you are expected to repay.  

If you notice here, my interest is less than  what was shown to me when I was taking the loan  

and that is because I didn't keep the loan for the  entire seven days. Binance only charges interest  

for the hours or days that you keep the loan for.  I would just enter the amount to be repaid here  

and if I click on "Confirm repayment", then that  amount of USDT will be taken from my spot wallet  

to repay the loan and my Doge coins will  be returned to my spot wallet instantly. 

If I go back to the loan orders page, I  will see the status of my loan as "Repaid". 

You also have the option of repaying your  loan with your collateral. If for some reason  

you don't have the coin you borrowed to  pay back, you can tick this box here to  

ask Binance to sell the equivalent of the  amount you borrowed from your collateral  

and use that to repay the loan. If I select this  option, the system will show me the price at  

which it will sell my Doge coins and the number  of coins they will sell. If I'm okay with it,  

I will click on "Confirm repayment". The status  of the loan will change to "Repaid" and if I go  

to my spot wallet now, you will notice that some  of my Doge coins have been sold to repay the loan. 

If for some reason your repayment date is overdue  that is you are unable to pay at the end of the  

agreement period, for example, in my case if for  some reason I'm unable to pay back this USDT after  

seven days, Binance will 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 but during this time you will be  

charged three times the hourly interest. If  you do not repay after this overdue duration,  

then your collateral will be  liquidated and used to repay your loan. 

So that is everything you need to know to be  able to use Binance crypto loans. If you would  

like to get started, then click the link in the  description box below to visit the Binance crypto  

loans page today. If you don't have a Binance  account yet, then you can click on my referral  

link in the description box below to create your  account. Using my referral link will give you 10%  

off your trading fees when you  start trading on the platform. 

Thank you for watching. If you have any questions,  you can leave them in the comments and I will  

answer them as best as I can. God bless your hustle.