Flexible loans allow cryptocurrency holders to access liquidity without having to sell their assets. By using your digital assets as collateral, you can borrow funds seamlessly and continue to benefit from potential market upside. This guide walks you through the application process step by step and answers common questions about borrowing flexibility.
Step-by-Step Guide to Applying
Accessing the Loan Feature
Begin by navigating to the loan section of your preferred platform. Whether using a mobile app or web interface, the process remains intuitive and user-friendly.
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Selecting Loan Parameters
Choose the cryptocurrency you wish to borrow and enter your desired amount in the designated field. Consider your borrowing needs carefully while remaining mindful of collateral requirements.
Choosing Your Collateral
Select single or multiple cryptocurrencies to serve as your loan collateral. Different assets carry varying discount rates, which can affect your borrowing power and liquidation thresholds.
Reviewing and Confirming
Carefully examine the order summary, including interest rates and loan terms. After reading and agreeing to the user agreement, finalize your request to initiate the borrowing process.
Understanding Flexible Loan Mechanics
Borrowing Limits and Leverage
Your maximum borrowing capacity depends on both your account tier and the platform's leverage policy. The system automatically applies the lower of these two limits to ensure responsible lending practices.
Loan-to-Value Considerations
The liquidation LTV varies based on your chosen collateral assets. Tokens with higher volatility or lower discount rates typically have more conservative LTV thresholds to protect both borrowers and lenders.
Multiple Loan Management
You can apply for additional loans using different currencies, excluding those already pledged as collateral. However, increased borrowing may require additional collateral if your LTV exceeds initial levels.
Frequently Asked Questions
What verification is required for flexible loans?
You must complete identity verification procedures before applying for any borrowing products. This standard security measure helps protect your account and ensures regulatory compliance.
How is borrowing interest calculated?
Annual Percentage Rates (APR) are calculated hourly based on market conditions. The rate displayed during application reflects the previous hour's average, while your actual borrowing rate updates in the subsequent calculation period.
Why can't I use the same currency for collateral and borrowing?
The system prevents using identical currencies for borrowing and collateral to maintain proper risk management. This separation ensures that your collateral retains independent value from your borrowed assets.
What triggers forced repayment?
Forced repayment occurs when platform-wide borrowing limits for specific cryptocurrencies are exceeded. The system automatically sells collateral assets to repurchase borrowed tokens and maintain system stability.
How are collateral values determined?
All calculations use spot mark prices to determine collateral values and borrowing power. This real-time pricing ensures accurate valuation of your pledged assets throughout the loan period.
Can I still earn staking rewards on collateralized assets?
Yes, certain staking assets like BETH continue earning rewards even while serving as loan collateral. This allows you to benefit from both borrowing liquidity and ongoing staking returns.
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Why might my collateral remain locked after repayment?
If the remaining collateral has a low discount rate, immediate transfer might be restricted. You can gradually reduce collateral through multiple operations in the loan management interface.
How does forced repayment prioritize asset sales?
The system sells collateral assets with lower conversion rates first, followed by those with higher rates. When conversion rates are identical, higher-value assets are prioritized to efficiently cover repayment needs.