Binance Launches Lite Loan With No Liquidation for 30 Days

On August 4, Binance announced the launch of Lite Loan, a simplified borrowing product for eligible master-account users. The product allows users to borrow up to 1,000 USDT immediately by pledging bitcoin as collateral, with a fixed 30-day term and no price-triggered liquidation during that period.

Borrowers pay a nonrefundable service fee deducted from the loan amount at issuance, with no additional interest charged during the initial 30-day term. A promotional rate of 0.5% applies for orders completed from August 4, 10:00 UTC through September 3, 09:59 UTC, after which the standard 1% fee resumes.

Collateralized crypto lending lets users obtain liquidity while retaining exposure to their pledged assets. Eligible bitcoin held in a user’s Spot or Funding Account is locked as collateral and enters Binance Simple Earn, continuing to generate yield while the loan remains outstanding. Users cannot withdraw or transfer the pledged bitcoin until they repay the full balance and recover the collateral through their Earn Account.

After the 30-day term expires, Binance applies daily penalty interest at a fixed simple annual rate of 36% to the outstanding balance. A margin-call notification is sent when the loan-to-value (LTV) ratio reaches 85%, and liquidation occurs at 91% LTV or after the balance remains overdue for 30 days, whichever comes first. During liquidation, the collateral is used to repay the entire loan. Currently, the liquidation fee is set at 0%, but Binance may restore the standard 2% fee and apply a risk-based adjustment to each collateral asset’s market value.

Early and partial repayments are available without extra charges, using USDT or other eligible crypto assets. Lite Loan broadens Binance’s lending portfolio beyond its flexible-rate, fixed-rate, VIP, and institutional products, targeting smaller borrowers with fixed terms and simplified conditions.

Other major exchanges also offer bitcoin-backed credit. Coinbase, for example, provides bitcoin-backed USDC loans with flexible repayment, allowing eligible users to borrow up to 5,000,000 USDC against bitcoin, among other assets.

Source: https://news.bitcoin.com/featured/binance-launches-lite-loan-with-no-liquidation-for-30-days/