Binance launches 30-day bitcoin-backed Lite Loan

Binance launched Lite Loan on Aug. 4, offering eligible master-account users the ability to borrow up to 1,000 USDT by pledging bitcoin as collateral. The initial term is 30 days and carries no price-triggered liquidation. Borrowers pay a one-time, nonrefundable service fee deducted from the loan; a promotional 0.5% fee applies for orders completed from Aug. 4 at 10:00 UTC through Sept. 3 at 09:59 UTC, after which the fee rises to 1%.

Borrowed funds are available immediately and may be used both on and off the Binance platform. Binance wrote: “Borrowed funds are available immediately and can be used both on and off the Binance platform.” The product does not charge additional interest during the initial 30-day term. Eligible bitcoin must be held in a user’s Spot or Funding Account and is moved into Binance Simple Earn for the loan duration, where it continues to earn yield but cannot be withdrawn or transferred until the borrower repays the full balance.

If a loan remains unpaid after 30 days, the outstanding balance accrues penalty interest at a fixed simple annual rate of 36%, calculated daily. The exchange issues a margin-call notification when loan-to-value reaches 85% and begins liquidation when loan-to-value hits 91% or if the balance remains overdue for 30 days, whichever happens first. Liquidation uses the pledged collateral to repay the loan; Binance currently sets the liquidation fee at 0% but reserves the right to restore a standard 2% fee and apply risk-based adjustments to collateral valuations during liquidation.

Borrowers may make early or partial repayments without extra charges using USDT or other eligible cryptocurrencies. Lite Loan is capped at 1,000 USDT and joins Binance’s flexible-rate, fixed-rate, VIP and institutional lending products. Collateral requirements, borrowing limits and loan-to-value calculations vary across those products.

Other exchanges are also expanding bitcoin-backed credit products. One major exchange offers bitcoin-backed USDC loans with flexible repayment and higher limits, including up to 5,000,000 USDC against bitcoin for eligible users.