Binance announced the launch of Binance Fixed Rate Loans, providing borrowers with predictable costs and flexible loan terms. This offering is designed to support larger loans and long-term financial planning by allowing users to choose a fixed interest rate.
According to a press release by Binance, Binance Fixed Rate Loans introduce a streamlined process for borrowers and suppliers, allowing users to secure fixed interest rates and utilize over-collateralization for stability. Borrowers have the option to customize loan amounts, interest rates, and durations, with a minimum borrowing requirement of $50,000 equivalent in stablecoins. Suppliers can earn predictable returns while avoiding exposure to market volatility, as Binance manages the entire loan process.
For borrowers, the Fixed Rate Loans feature provides flexibility in structuring loans to fit individual needs. The process begins with selecting the desired loan parameters and setting up collateral from eligible assets in the Spot Wallet. Borrowers must monitor their Loan-to-Value (LTV) ratio to prevent liquidation and ensure timely repayment to avoid late fees, according to Binance.
Suppliers can lend their assets by placing an order that locks in fixed Annual Percentage Rates (APRs) for stable returns. Once matched with a borrower, their assets begin accruing interest and are returned along with the principal at the end of the loan duration, according to Binance.
Binance operates as a major global blockchain platform, featuring the largest digital asset exchange by trading volume. The company offers a wide range of financial products and services and is known for its comprehensive ecosystem, which includes educational resources, research, charitable initiatives, and an NFT marketplace. Binance supports users around the clock in 40 languages and prioritizes security and regulatory compliance to protect its users and contribute to the growth of the blockchain industry. In 2022, the platform saw significant activity, with an average daily trading volume of $65 billion and 300 billion spot transactions.