We are rolling out a new repayment setting that enables the liquidation of collateral by request to repay a loan in full or to make a regular payment. Also, it allows repaying with any other assets you have in My Wallet, not only your loan currency.
A lot can happen to collateral in a long-term loan, especially in the crypto world that lives at supersonic speed. Now borrowers get control over their locked assets. For instance, if you can see that your collateral coin is crashing, you request liquidation and repay your loan before the coin loses its liquidity.
How do I choose repayment asset?
First, go to My Loans and start a payoff process for an active borrowed loan.
The Loan Repayment screen, shown in Figure 1, gives you three options, and it is worth some consideration which one you pick here. You can select one by tapping My Loans > Repay > Regular Scheduled Repayment / Full Early Repayment.
These three options include:
- Loan currency.
Repay your loan as usual with the asset of your loan.
- Loan collateral. Payout happens at the cost of your collateral. Please be careful, payments made with collateral increase the LTV of an active loan and the risk of collateral liquidation in case of market fluctuations.
- Another asset. Choose any fiat or crypto asset you have in a sufficient amount in My Wallet. Note that this option can be unavailable for small amounts.
In the case of non-repayment, platforms' algorithm remains as it was before. We make a payment automatically if the borrower has enough loan currency in My Wallet. Otherwise, we liquidate the part of the collateral needed to make payment.
How lenders get their assets back?
The update doesn't affect lenders in any way. They continue to receive payments in the loan currency no matter which asset borrowers choose. CoinLoan will take care of that.
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