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May 12
2020
How To Borrow Crypto on Binance: Margin or Loans?

If you find yourself short on crypto funds, we can lend you some crypto via Binance Margin and Binance Loans. In this article, learn how you can use both, and figure out which borrowing product suits your needs.

At Binance, we want to help our customers make the most out of using their crypto. We understand that there are times when you need to borrow some crypto funds for various reasons. You may need just a bit more crypto to fully maximize a trading opportunity. Or maybe you need extra funds to withdraw and you want to get this money without jeopardizing your holdings in your account.

Regardless of your reason, Binance currently has two products on its suite to cater to your crypto borrowing needs:

1. Binance Margin. Launched in July 2019, Binance Margin is built into the main exchange platform of Binance. When you enable Binance Margin, you can access greater sums of capital by getting additional funds from a third-party provider, which is Binance in this case. Right now, there are 29 borrowable cryptocurrencies on Binance Margin.

When you use Binance Margin, you have the chance to amplify your trading results, resulting in bigger gains on successful trades in comparison to using just your existing funds. However, this also carries a risk of amplified losses, so borrow with caution.

2. Binance Loans. A more recent feature in our ever-expanding suite of crypto financial solutions, the Binance Loans platform allows you to borrow USDT or BUSD by securing a collateral amount of crypto within your account. 

You’re given options regarding how long you want your loan to last (options include seven, 14, 30, and 90 days), as well as the crypto you want to use as collateral (BTC, BCH, XRP, ETH, EOS, or LTC). The platform’s simple interface calculates the collateral and repayment amounts you’ll need to agree to for the loan, as well as the breakdown of how the interest is calculated.

Which Borrowing Service Should I Use? A Questionnaire Guide.

Here are a few questions that will allow you to discern which service you should use. 

1. Where will I use the funds?

If your answer is “for trading within Binance only,” you can choose Binance Margin.  When you borrow one of the current cryptocurrencies available on Margin, you can trade for the trading pairs that associated with the crypto you borrowed. But this constraint comes with some advantages we will discuss below.

However, if you intend to use the funds outside of Binance, you should choose Binance  Loans. The BUSD or USDT you receive can be taken out of your account or used in any way you want.

(Pro Tip: You end up paying for lower interest rates when you choose BUSD.)

2. How much do I want to borrow?

If your answer is “more than the crypto I have on my account,” you should choose Binance Margin. You can borrow up to 5x the amount of your collateral for your trading needs. Just be aware of the amount you should maintain in your account plus the interest rates and payments that come with the privilege of punching above your weight in trading.

Otherwise, you can use Binance Loans for amounts that are up to 65% of the value of your collateral for the loan. The freedom to use your loaned amount wherever you may need it comes with a risk for the lender (in this case, Binance), so collaterals and limits are used to make the loan transaction worthwhile for both parties.

3. How long do I want to hold this debt, or what kind of interest rate am I comfortable with?

If you want defined deadlines and interest rates for your loan, Binance Loans is for you. Once you agree to the loan terms and get your BUSD or USDT, the agreed-upon payment amounts and rates will stay in place, no questions asked. Just settle the loan within the period to avoid losing your collateral.

If you are comfortable with flexible deadlines and interest rates, you’ll do fine with Binance Margin. You can retain the leverage you obtained, for as long as you have the means to pay for the fluctuating benchmark interest rates that come with your chosen token during the time that you hold the loan. With more power comes more responsibility, and all that.

Regardless of what you end up using, we are glad to provide you with some choices regarding your borrowing needs, and we’ll seek to enhance these services and maybe even come up with some new ones in the future. After all, we’re always building something here.

Learn more about Binance Margin on this FAQ. For Binance Loans, there’s a detailed FAQ here, just below the loan interface.