Although, this is also the first time I'm hearing of a Bitcoin backed loan, that's given in fiat. Sounds like a scam to me, doesn't really make much sense for the borrower or the lender considering the high volatility of Bitcoin, which I'd assume is written in the contract, that's if it isn't just an outright scam.
They've been around for ages (in bitcoin time) , I think Celsius was launched in 2017 for example.
It works for short-time small sums when basically you're not risking much as you can overcollateralize it easily, and it might not be true fiat but Darkstar_ does offer USDT loans.
Speaking of larger sums, like mortgages we've just had a thread about it, and I've already
pointed out the flaws and risks in it and also the pro, not going to dive in this again but when you play with large sums and little reserves it sounds to too dangerous for me.