Binance Crypto Loan Guide: Complete Step-by-Step Tutorial for Pledged Lending

Introduction to Binance Pledged Lending

Binance's lending process differs significantly from traditional banks. With just a Binance account, users can apply for loans directly online, making the process exceptionally fast and convenient.

The core principle of Binance Pledged Lending is:

"Users can pledge their existing cryptocurrencies as collateral to borrow other digital assets."

For example, you can pledge BNB to borrow a proportional amount of USDT.

How Binance Pledged Lending Works

The complete lending process involves these key steps:

1. Users access the Binance Pledged Lending platform to select their desired loan and collateral currencies
2. Binance transfers the collateral from the user's spot account to the pledged platform account
3. Simultaneously, Binance disburses the loan amount to the user's spot account
4. Interest is calculated daily
5. Users can make partial repayments or full early repayments during the loan term
6. Upon maturity, Binance requires full repayment - overdue loans incur higher interest and face forced liquidation

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Available Cryptocurrencies for Lending and Collateral

Borrowable Assets:

• BUSD
• USDT

Acceptable Collateral:

• BTC
• BCH
• BNB
• XRP
• ETH
• EOS
• LTC

Each cryptocurrency has different interest rates and collateral ratios (explained below). For detailed information, visit the official Binance platform.

Understanding Collateral Ratio

The collateral ratio is a critical metric in crypto lending, calculated as:

Collateral Ratio = (Borrowed Asset Value + Accumulated Interest) / Collateral Asset Value
*All values are converted to BTC equivalent for calculation

There are three key ratio thresholds:

1. Initial Collateral Ratio: Determines how much you can borrow against your collateral

   • Example: BNB's 55% ratio means to borrow 100 USDT, you need ~6.67 BNB (at current rates)
2. Margin Call Ratio (75%): Triggers when your ratio reaches 75%, requiring additional collateral
3. Liquidation Ratio (83%): Automatically liquidates positions when reached to protect the platform

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Interest Calculation and Loan Terms

Key features of Binance's interest structure:

• Daily interest calculation (minimum 1 day)
• Four loan term options: 7, 14, 30, or 90 days
• Annual rates: 18.25% (7-30 days), 18.98% (90 days)
• Daily rate ≈ 0.05% (1.5% for 30 days)

Early repayment is allowed without penalty, with payments applied to interest first.

Complete Operational Guide

1. Borrowing Process

• Minimum loan: 100 USDT
• System automatically calculates required collateral
• Select loan term to see interest implications
• Confirm order details before finalizing

2. Managing Collateral Ratio

Adjust your ratio by:

• Adding collateral to lower ratio
• Removing collateral (if ratio is safely low)
  Monitor ratios closely during market volatility

3. Repayment Options

Choose between:

• Partial repayments
• Full early repayment
• Scheduled maturity repayment

Consequences of Late Repayment

• Maximum grace period: 3 days (7/14-day loans) or 7 days (30/90-day loans)
• 3x daily interest charged during grace period
• After grace period: forced liquidation occurs

FAQ Section

Q: What happens if my collateral value drops suddenly?

A: You'll receive margin calls at 75% ratio. If it reaches 83%, positions auto-liquidate. Always monitor market conditions.

Q: Can I change my collateral after taking the loan?

A: Yes, you can add or remove collateral through the "Adjust Collateral Ratio" option.

Q: Is there a penalty for early repayment?

A: No, Binance doesn't charge early repayment fees. You save on future interest costs.

Q: How often is interest calculated?

A: Interest accrues daily, with calculations based on your initial loan terms.

Q: What happens if I don't repay on time?

A: After grace periods (3-7 days), positions automatically liquidate with additional interest penalties.

Final Thoughts

Binance Pledged Lending offers:

• Short-term funding solutions (1.5% for 30 days)
• Flexible collateral options
• Transparent interest structures

While useful for experienced traders, beginners should approach cautiously due to:

• Liquidation risks
• Significant interest costs
• Market volatility impacts

Disclaimer: This content is educational only. Cryptocurrency trading involves substantial risk. Consider your risk tolerance before trading.