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.
You are free to do as you wish. But you are wrong. Any lender can charge any amount. Any requester can deny. No one is forcing or pulling tricks.