Binance Launches Fixed-Rate Loans for Stablecoins

Binance has introduced a new fixed-rate loan feature, allowing users to lock in a stable interest rate for the duration of their loan term. This new offering provides users with predictable annual percentage rates (APRs), ensuring consistent costs throughout the loan period.

Available Loan Options

Currently, Binance offers fixed-rate loans for two stablecoins: USDC and FDUSD.

USDC Loans

• Interest Rate: 7.8% fixed
• Term: 30 days
• Minimum Amount: 50,000 USDC

FDUSD Loans

• Interest Rate: 11% fixed
• Term: 30 days
• Minimum Amount: 50,000 FDUSD

Loan Process and Repayment

To secure a loan, users must place an order on Binance and select their collateral. Once the order is matched, the funds are transferred to the user’s Spot Wallet, with the interest deducted upfront. Loans must be repaid by the due date to avoid late fees, which are set at three times the interest rate of the loan.

For lenders, Binance ensures the safety of the principal amount once an order is matched, with interest accruing from that point. The full principal and earned interest are returned at the end of the loan period.

Risk Management and Features

Binance manages these loans with a focus on over-collateralisation to mitigate risks and avoid liquidations. The platform also offers automatic repayment and renewal features to enhance the borrowing experience.

While the fixed-rate loans offer stability and convenience, users should be aware of the significant late fees and the need for careful management of collateral to avoid potential issues.