Cryptocurrency trading platforms offer advanced financial tools to help users maximize capital efficiency. Among them, Gate.io provides two powerful borrowing mechanisms: collateralized lending and margin borrowing. While both allow users to borrow digital assets by posting collateral, they differ significantly in structure, risk profile, and use cases.
This guide breaks down how each system works, compares their core features, and walks you through the step-by-step processes—so you can make informed decisions based on your trading goals and risk tolerance.
What Is Collateralized Lending on Gate.io?
Collateralized lending allows users to lock up specific cryptocurrencies as collateral in exchange for borrowing other digital assets. During the loan period, borrowers pay interest but retain full control over the borrowed funds.
Supported Collateral & Borrowable Assets
- Accepted collateral: BTC, ETH, USDT, EOS, GT
- Borrowable coins: Hundreds of options including stablecoins and altcoins
You can search for available loans directly in the collateralized lending section, making it easy to find competitive rates across multiple assets.
Once borrowed, funds can be used freely—whether for spot trading, futures positions, DeFi yield farming, or even off-platform spending—as long as repayment occurs before the due date.
Loan Terms and Interest Rates
- Loan duration: 10-day cycles (renewable)
- Interest calculation: Based on actual hours borrowed (minimum 4 hours)
- Annual interest range: Starts from 4%, varying by asset and lender
Higher-risk loans may carry significantly higher rates—up to 365% APR for certain altcoins—so always review terms carefully.
👉 Discover how to optimize your borrowing strategy with flexible funding options.
How to Borrow via Collateralized Lending
- Select a Borrowable Asset
Navigate to the collateralized lending page and choose the coin you want to borrow (e.g., ETH). - Review Available Offers
The interface displays real-time offers including daily interest rate, annualized rate, and available quantity. Initiate a Loan Request
Click “Borrow” on your preferred offer. A popup will guide you through four key steps:- Enter desired amount
- Choose collateral type (e.g., USDT)
- Adjust collateralization ratio
- View required collateral value
Understand the Collateralization Ratio
This is crucial:Collateralization Ratio = (Loan Value / Collateral Value) × 100%
Example: Borrowing 0.1 ETH (~$260) with $370 USDT collateral results in a 70% ratio.
⚠️ Risk Alert: If the ratio exceeds 90%, the system triggers automatic liquidation—your collateral is sold to repay the loan.
Notifications are sent at 80% via SMS, email, or app alert. Lower ratios mean more safety buffer.
- Confirm and Receive Funds
After entering your fund password, the loan is processed. Funds appear in your spot account immediately. - Enable Auto-Renewal (Optional)
For long-term needs, enable auto-renewal to extend the loan every 10 days using the best available rate at that time.
Repaying a Collateralized Loan
- Manual repayment is required unless auto-renewal is enabled.
- Full repayment only—partial repayments aren’t supported.
- Go to the “Pending Repayment” section, click “Repay,” confirm the amount, and enter your password.
- Upon success, your collateral is released back to your spot wallet.
🔍 Key Notes:
- You cannot withdraw collateral until the loan is fully repaid.
- All collateral is drawn from your spot account and returned there after repayment.
- Monitor your collateralization ratio regularly to avoid unexpected liquidation.
What Is Margin Borrowing on Gate.io?
Margin borrowing enables traders to amplify their buying power using leverage—typically between 2x and 10x—by pledging margin as security.
Unlike collateralized lending, which focuses on asset flexibility, margin borrowing is designed for short-term leveraged trading, especially in volatile markets.
Key Features
- Leverage range: Up to 10x depending on the trading pair
- Supported pairs: Hundreds of cross-margin trading pairs
- Interest rates: As low as 0.01% daily (~3.65% annualized)
- Loan term: 10-day default cycle with optional auto-renewal
For example: Deposit 100 USDT as margin → borrow up to 900 USDT → trade with 1,000 USDT total capital.
This high-leverage model increases profit potential but also magnifies risk—small price movements can lead to rapid losses.
How to Use Margin Borrowing
- Access the Margin Trading Page
Visit the margin borrow section and select your desired trading pair (e.g., BTC/USDT). - Transfer Margin Funds
Click “Transfer Margin” and move funds from your spot wallet (e.g., 100 USDT). - Check Borrowing Capacity
For BTC/USDT (up to 10x), 100 USDT margin allows borrowing up to 900 USDT. - Choose a Lending Offer
Browse available interest rates and click “Borrow” to take out funds (e.g., 400 USDT at 5x leverage). - Confirm Transaction
Enter your fund password to complete the process.
After borrowing, your available balance updates instantly—now showing both spot and margin balances separately.
Repaying a Margin Loan
- Go to your active margin orders.
- Click “Repay” next to the relevant loan.
- Confirm amount and authenticate with your password.
- Repaid funds reduce your outstanding debt; any excess margin can be transferred back to your spot account.
Risk Management: Understanding Risk Rate
The risk rate determines liquidation thresholds:
Risk Rate = Total Asset Value / Borrowed Asset Value × 100%
Lower values indicate higher risk:
Warning threshold:
- 3–5x leverage: Below 130%
- 10x leverage: Below 110%
Liquidation threshold:
- 3–5x: Below 110%
- 10x: Below 105%
If these levels are breached, forced liquidation occurs automatically.
👉 Learn how top traders manage leverage without overexposing their portfolios.
Collateralized Lending vs. Margin Borrowing: Side-by-Side Comparison
| Feature | Collateralized Lending | Margin Borrowing |
|---|---|---|
| Core Principle | Lock one asset to borrow another | Post margin to gain leveraged exposure |
| Max Leverage | Under 1.7x | 2x–10x |
| Interest Rate | From 4% annual | From 3.65% annual (0.01%/day) |
| Risk Level | Lower; liquidation at >90% collateral ratio | Higher; varies by leverage tier |
| Collateral Options | Limited (BTC, ETH, USDT, EOS, GT) | Hundreds of supported coins |
| Use Case | Long-term funding, flexible usage | Short-term leveraged trades |
Frequently Asked Questions (FAQ)
Q: Can I partially repay a collateralized loan?
A: No. Gate.io requires full repayment within the 10-day window unless auto-renewal is enabled.
Q: Are interest rates fixed or variable?
A: Rates depend on market supply and demand among lenders. They may vary between offers and over time.
Q: What happens if my margin position gets liquidated?
A: The system sells part or all of your position to cover the debt. Any remaining funds are returned to your account.
Q: Can I use borrowed funds for futures trading?
A: Yes—both collateralized and margin loans can be used across different trading products after transfer.
Q: Is there a minimum borrowing amount?
A: While no universal minimum exists, some lenders set minimum thresholds per offer.
Q: How often is interest charged?
A: Interest accrues hourly and is calculated based on actual usage (with a 4-hour minimum charge).
Final Thoughts: Which Option Should You Choose?
- Beginners: Start with collateralized lending due to lower leverage and clearer risk parameters.
- Experienced Traders: Use margin borrowing strategically for short-term plays where timing and volatility work in your favor.
- Always monitor your positions closely and consider setting alerts for key thresholds.
Whether you're looking to expand trading capital or access liquidity without selling holdings, understanding these tools empowers smarter decision-making in the dynamic world of crypto finance.
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