What happens if my loan collateral value drops?

When the collateral value of a loan in the Nebeus platform drops, several important factors come into play. Nebeus uses cryptocurrencies as collateral for loans, and cryptocurrency markets can be highly volatile. If the value of the collateral decreases significantly, this change may impact the loan-to-value ratio. The loan-to-value ratio is a measure that compares the loan amount to the value of the collateral. If the ratio changes unfavorably, it may be necessary to take action to maintain the loan agreement. This could involve either increasing the collateral to ensure that the loan remains secure or paying off a portion of the loan. In some cases, if the value of the collateral falls below a certain threshold, Nebeus may issue a notification or warning to the borrower, urging them to take corrective measures to avoid potential liquidation. Liquidation occurs when the platform automatically sells the collateral to repay the loan, which can happen if the borrower does not act to address the declining collateral value. Therefore, it is crucial for borrowers to monitor their collateral value and remain aware of market conditions to ensure that their loans remain secure. For the most accurate and updated information, borrowers might consider checking the current web page related to Nebeus services.