I'd be interested to fill this but not for 1BTC.
Usually lenders ask for at least 120% collateral. If you are going to use 65 LTC then I could give you a 0.085 btc loan. If you agree let me know.
What a strange and weird counteroffer. He wants 1 BTC and you reject and counteroffer 0.085. Not even 10% of the proposed loan amount.
Unless you meant 0.85, then that would be a fairly reasonable counteroffer.
But if you truly meant 0.085 as per your post above, then you are indeed a loan shark and should be red tagged accordingly. I despise people who take advantage and exploit other people in such horrendous ways, a classic example of which is exemplified here.