- What is Mortgage Loan?
Mortgage Rate refers to the ratio between loan principal and the market value of mortgaged digital currency. It is reasonably formulated and floated according to factors such as price fluctuations and trends of digital currencies. Therefore, the mortgage rates may vary depending on loan currencies. Mortgage rates can be subject to large price fluctuations of digital currencies or other reasons, which may cause the closing of your position.
For example, if a borrower wants to borrow 70,000 USDT, and the mortgage rate is 70%, he needs to mortgage the digital currency worthy of 100,000 USDT.
- Index Price
Currently, the index price is taken from the latest prices of Binance and Huobi Pro with a weight of 70% and 30% accordingly. It will affect the maximum loan amount, and the mortgage rate in the loan order.
- How isthe Maximum Loan Amount Calculated?
Maximum Loan Amount = Available Amount (mortgage coin) * Index Price * Mortgage Rate
For example: Mortgage BTC to loan USDT, the current index price of BTC/USDT is 7,000, available BTC is 1, and the mortgage rate is 70%, then
Max Loan Amount (USDT) = 1 * 7,000 * 70% = 4,900
- How Long can a Borrower Get the Loan after Mortgaging?
The loan needs to be reviewed, generally, it takes 1 working day for the review.
- How is the Interest Calculated?
The interest-bearing is started from the day passing the loan review, and is calculated at 0:00 (UTC +8) on every natural day. Any time less than a day will be considered as a day.
If to repay the loan in advance, users need to pay off all the realized and unrealized interest.
For example, loan 10,000 USDT for 30 days with the daily interest rate of 0.02%, if to repay on the 10th day after the loan, then the interest needs to repay is: 10,000 * 0.02% * 30 = 60 USDT.
- What if the Borrower Fails to Repay before Due Date?
For overdue repayment, interest on overdue days is calculated based on the overdue rate，please refer to “Mortgage Rate Fee Description”.
- When the Mortgage Assets Appreciates, can I Transfer?
Yes, when the value of mortgage assets rises, users will be allowed to transfer part of it, and there will be a transfer amount limit, which is to prevent the occurrence of liquidation after transfer.
- What is Alert Mechanism?
When the mortgage rate is higher than or equals to the alert line, the borrower will be informed via SMS, and after receiving the message, he/she should add mortgage or repay the loan. Currently, the alert line for mortgage rate is 80%.
- What is the Liquidation Mechanism?
When the mortgage rate reaches the liquidation mortgage rate (currently 90%), all the mortgage assets will be deducted to repay the outstanding loan and interest. Liquidation will not involve any assets other than mortgage assets.