I'm not convinced about this.
Normally one gets a loan in the currency he earns, so he can avoid unnecessary risks caused by the price fluctuations. And for now there are not so many people that earn crypto for they every day jobs.
Then unless somebody is long term holder, he may not have the correct collateral. And if he's a long time holder,.. he may not need the loan.

Also in theory crypto price is rising while fiat value is falling due to inflation, making fiat loans cheaper.

I see 2 big uses for crypto loans:
1. Very short term loans, to allow people handle certain problems without touching their normal stash. Also this kind of loans can go without collateral for reputable members, making them very interesting.
2. Short/medium term loans for market speculators.

I don't see any of these competing for real with the established loaning (maybe excepting the pawn shop, if you consider that as loan).