Binance Loans introduces fixed-interest loans for predictable borrowing

Binance Loans now offers fixed-interest rate loans, providing users with predictable borrowing costs. This feature allows borrowers to lock in an interest rate for the entire loan term, benefiting both providers and borrowers. Additionally, there is a guarantee of a stable annual percentage rate throughout the loan period.

Currently, the platform offers fixed-rate loans for two stablecoins: USDC and FDUSD. Borrowers can obtain loans in USDC at a rate of 7.8% for 30 days with a minimum loan amount of 50,000 USDC. For FDUSD, the fixed rate is 11% for 30 days, also with a minimum loan amount of 50,000 FDUSD.

Loan application process

To apply for a fixed-rate loan, users must first submit a loan request on Binance, selecting appropriate collateral assets. Once the application is approved, the loaned funds are credited to the user’s spot wallet, with interest deducted upfront. Timely repayment is crucial, as late payments incur a penalty of three times the original interest rate.

Benefits for providers

Asset providers, in turn, receive guarantees from Binance for the protection of their funds once the order is fulfilled. Interest starts accruing from the moment the loan is issued, and the principal amount, along with accumulated interest, is returned at the end of the loan term.

Binance ensures a smooth process by managing over-collateralized loans to minimize liquidation risks. The platform also offers options for auto-repayment and auto-renewal, enhancing convenience for users.