If someone believes the LTC/BTC exchange rate will increase then they would take that loan.
No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan
If they sell the collateral they are offering then they will have to pay exchange fees, and would miss out on any additional price appreciation between the time they take out the loan and the time they get the money to repay the loan.
A lot of loans secured by alt coins are likely done for altcoin trading so the loans essentially are allowing for additional leverage