What Happens If I Don't Pay Back My Loan from CoinLoan?
When borrowers can't repay the loan from CoinLoan, the system will make an automatic repayment on the same day. Make sure that you have enough money on your account or the system will use the collateral asset to make a repayment. There is a liquidation fee of 7% whether it's for partial or full repayment.
Do you have questions about loans from CoinLoan? CoinLoan users can take out a loan so long as they have a collateral asset deposited into their account. They can repay the loan by logging in to their account and choosing a repayment method.
CoinLoan will send out notifications about your upcoming repayment so you don't miss a deadline. If you're not able to repay the loan, the system will make an automatic repayment but you'll need to have enough money in your CoinLoan account. Otherwise, the system will use your collateral asset.
Collateral Liquidation Process
Collateral liquidation is when the system sells a part of your collateral to repay your loan. There is a 7% liquidation fee whether it's for a partial or full liquidation process.
Liquidation can occur in these cases:
- You missed a monthly payment
- You missed the final loan payment
- The market value of your collateral drops
After missing a payment, the system will make an automatic payment the next day. When the market value of your loan drops, you'll be notified about it. If your LTV reaches 80%, they will mark your loan with a red liquidation label. When it reaches 90%, they will automatically liquidate your collateral asset by selling it.
Using the Collateral to Repay the Loan
While borrowers are not able to withdraw the collateral unless the loan is fully paid, they can use it to make their repayment either partially or in full.
Here are the steps:
1. Log in to your account, go to Loans and click Repay.
2. Select regular or full early repayment.
3. Hit use loan collateral repayment.
If you fully repay the loan, the excess collateral will be credited to your account. For partial repayment, you risk collateral liquidation if the market fluctuates.
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