Im not saying its a bad idea overall, but its impossible to know if its going up that much because in my example ltc went from 1$ to 1.2$ wich is a substantial increase, if you are that good to predict that kind of stuff you dont need to borrow 1 btc, you can just do it with your money and make the earnings by yourself.
You're right. I reckon a lot of such small loans are not really taken to bet on exchange rate, but simply to earn a trust score.