Disclaimer: This article is intended only to share my experience with crypto loans at Binance. This is not financial advice, if you'd like to know more about how crypto loans work please DYOR! It is very risky, don't jump like a Kangaroo 🦘!

Crypto loans are available on any platform that offers them, you can have a loan using your hodl coins and used it for collateral. If you wish to hold a certain coin for long term and do not plan to sell it yet, you can make loan of other coins or stablecoins where you can use for whatever reason you want.

It's my first time availing loan in crypto, if some people like to avail loans and used them to buy for other things, mine is different I used loan as my capital. Way back, I remember I keep availing of an online loan app from Tala Philippines, it started from 2,000 Php then gradually increase my loanable amount because I pay it on time or earlier.

I used that money I loans as my capital before when I tried online selling and join some investment scheme, I got busted later on as the investment turned into a scam. Well, that's another story but what I am going to share in this article I'll tell you how my crypto loan went wrong 😆

How did my crypto loan go wrong?

It's been 3 months that my crypto loans at Binance got stuck. I was curious how these crypto loans work, so I tried it since I am holding my BCH I made it as my collateral, but sadly I failed to make it as a short-term loan lol.

My $YFI trade got stuck-up

I bought $Cake last time and I made a $25 profit from the $130 USDT I loaned.

Then the due date of my loan is still far so I bought $YFI at $45608 price, because I don't pay attention to my trade I wasn't able to cancel the order, I remember I did that Friday and before when the weekends come the market goes down and it did went down until $23806 level almost half of the price when I bought lol 😆

The total amount I used was exactly $140 but right now I am still at loss amounting to $20.I left the $15 in case I need some extra. I even renew my loan and paid I think $2+ only so not bad.

Yesterday (August 9) was the due date of my loan again, I was thinking if I'll pay it as I have $160, $120 from YFI, and $40 spare for doing small trades but I cannot accept that I am at loss.

I loaned again to pay for the coming due date of the first loan

I have 0.82BCH as my collateral for my loan and the TVL is around 28-31% only, just to make sure it is far from liquidation. This time I chose 180 days maturation, so I won't be stress when monthly due date comes.

As I said I cannot accept to sell my $YFI at a loss just to pay my loan, so what I did is to adjust the LTV and remove some collateral which is 0.40BCH, and made a loan again with an amount of $137.50 then chose 180 days term that incurs $12+ fees.

180 days is equivalent to 6 months if the market can recover then I can sell the $YFI already, even if it's just BE (break even) to the capital so I can pay my loan. After 180 days, my total loan payment would be $149.87 but if I repay early that amount will lower.

After the loan push through I pay the first loan that was due yesterday and adjust the TVL again so my collateral will not be at risk.

Is it a wise decision?

I don't know if this wise decision, I just had strong beliefs that the market will recover soon and I am just holding my BCH anyway.

I can sleep in peace now, and I will not be stress thinking about (Judith) due date lol. If I'll do better on my trade 6 months is a long time and I think I can make $150 enough to pay the total loan amount with its interest. I just don't like the idea of selling at loss when I can just hodl it for a while. I know I must have profit instead of this bullshit stuck up, but damage has been done hahaha.

I am not worried as well because if the market will recover and $YFI crossed at least $50,000 I can have a little profit from that and I can pay the loan right away earlier than its due date and the interest calculation will be lowered. All time high of $YFI is $95,000, let's see what will happen next.

I can loan again as I have more collateral and trade but I will not risk more of my BCH anymore.

KeyNOTES;

• If you are a trader always monitor your trade so it will not get stuck when the market starts sinking. But if you are trading in spot, if your trade went wrong just HODL!

• Never sell at loss, because in spot you'll only lose once you start selling at negative PNL.

• Never do this crypto loan if you don't know what you are doing because it also has liquidation especially if the price of your collateral goes DIPer. The Liquidation is at 83% the high risk bracket.

• If your collateral price drop and reached the medium risk, you'll receive a margin call via text or email to add collateral inorder to avoid liquidation. My collateral amount of BCH before was only 0.25BCH that's why I got that margin call when BCH drops to $400 below. I just keep adding it to lower the LTV.

• My current loan has 28.48% as of writing this article. If it's in green it means it is far from liquidation.

• Keep an eye of your collateral coin price to make sure your LTV is not at risk.

• Always TAYOR- Trade At Your Own Risk and always DYOR- Do Your Own Research.

Closing Thoughts

Since my partner was a way I am not so attentive with Trading anymore as I don't have much time, this was the reason why most of my trades got stuck because if I got busy with noise and read. cash, I forgot my trade lol.

Don't do trading if you can't pay attention especially in leverage, or else you'll get rekt!

I also learned there is no QUICK RICE scheme in trading, you'll have to eat a lot and learn a lot to master it lol. Indeed no shortcuts in getting rich haha!

I am not also trading with leverage now, I cannot spent sleepless nights to monitor anymore.

That's all, thank you for reading!

Date Published: August 10, 2021