Why you should borrow w bitcoin? For the same reason that you borrow fiat, you should take a loan if you have an idea for a productive activity but you dont have the bitcoin at hand.
Yes this is the only reason why you should loan and also be prepared to lose the loan and come up with the money + interest.
If you loan what you cant pay back you can get in big trouble so dont do that. Also possible to loan to invest in altcoin just before they skyrocket if you have good eye for it.
Exactly, theres only two thing would happen if you do make a loan to someone. If you saw an opportunity to earn decent profits you could possibly borrow to someone but still theres a risk because you wont know what would happen next its either a win or a loss. Therefore avoid loan as much as you can its better to invest your own money even in small amount that would do already.