Then wouldn't it be easier to just convert the ltc to bitcoins?
Why would you want to get rid of your Litecoins though? You use them as collateral, get your BTC, then once you pay your loan back you get all your Litecoins back too, regardless of price fluctuation
If I need a loan it means I need money. Let's say I need a 1 BTC loan and that I have 1 BTC worth of LTC. I would simply exchange them for 1 BTC, buy what I want, rentabilise it, re-buy LTC and voila! No loan. Unfortunatly, I don't have 360 LTC