TL;DR
- Binance has launched fixed-rate loans in USDC and FDUSD stablecoins, offering stability in borrowing costs.
- Loans for USDC have a fixed rate of 7.8%, and for FDUSD, 11%, with a minimum amount of 50,000 for both.
- Borrowers must repay the full loan amount before the due date to avoid late fees. Providers have their assets protected.
Binance has introduced a new fixed-rate loan option for stablecoin users, enhancing financial predictability for those seeking crypto loans. This new feature allows borrowers to lock in fixed interest rates for the loan period, providing stability in borrowing costs. Currently, Binance offers this option for two stablecoins: USDC and FDUSD.
For USDC, users can access loans with a 7.8% fixed rate for a 30-day term, with a minimum loan amount set at 50,000 USDC. For FDUSD, the fixed rate is 11% for the same term, with a minimum loan amount also of 50,000 FDUSD. These loans allow borrowers to know the exact costs in advance and avoid surprises during the loan period.
Say hello to Fixed Rate Loans!
Now we have more options for stablecoin borrowing and lending with fixed terms and custom APR.
More information ➡️ https://t.co/VZ9684CDbK pic.twitter.com/bfhSSHohlG
— Binance (@binance) September 5, 2024
How to Use Binance’s New Service?
To use this service, borrowers must place an order through the Binance platform, selecting eligible assets as collateral. Once the order is matched, the borrowed funds are transferred to the user’s Spot Wallet, after deducting the pre-calculated interest.
It is essential for borrowers to repay the full loan amount before the due date to avoid late fees, which are calculated at three times the loan interest rate.
On the other hand, fund providers have their assets protected by Binance once their order is matched. The supplied assets, along with the accrued interest, are returned to the provider at the end of the loan term. The exchange manages the loans in a way that they are over-collateralized to minimize liquidation risks, and offers auto-repay and auto-renew options to facilitate the process for users.
The introduction of fixed-rate loans aligns with Binance’s goal of offering more stable and predictable options in the market. This new feature provides greater predictability for borrowers and offers a reliable option along with a suitable system
