Any loan requires a counterparty, or several and that requires trust, you will have to decide for yourself how much that risk is worth, lets play this out

You could go fully collateralised on-chain P2P with a service like hodlhodl, but liquidity is not great so you have to limit your size or take out multiple loans and try to balance your LTV and interest rates in a range you can comfortably sustain over the repayment period (still trusting the stablecoin issuer IE tether)

A step above that could be doing it on a side-chain like Liquid or Rootstock, again liquidity is even less and you're using a layer with different trade-offs to the basechain, IE you still have to peg out later

Then theres the CEFI route, you pick a company lets say its LEDN or Unchained and you work with them, if anything goes wrong you have a multi-sig key to recover and you have someone to sue for breaking your contract terms

Then theres the wrapped Bitcoin, smart contract bridge altcoin DEFI where you're trusting

While you might think you're getting a good deal on interest rates versus the other options, you have to factor in MEV, paying all the gas fees to lock in the deal and for all your repayment transactions

Like Nerd says, DEFI its trust maximised