Borrow
Borrower Path
Loan Origination & Terms
The borrower's journey on Lendscape begins with loan origination. This process involves several steps:
Profile Creation: Borrowers create a profile on the platform, providing necessary personal and financial information.
Loan Request: Borrowers submit a loan request, specifying the desired amount, purpose, and preferred terms.
Collateral Specification: The borrower identifies the tokenized real-world asset (RWA) they intend to use as collateral.
Risk Assessment: Lendscape's AI-driven models assess the borrower's creditworthiness and the value of the proposed collateral.
Term Generation: Based on the risk assessment, the platform generates loan terms, including:
Interest rate (typically ranging from 20% to 35%, depending on risk profile)
Loan duration (usually between 3 months to 3 years)
Loan-to-Value (LTV) ratio (typically 30-50% of the collateral value)
Repayment schedule (monthly, quarterly, or custom)
Term Acceptance: The borrower reviews and accepts the proposed terms.
Collateralization of Tokenized RWAs
Once the loan terms are accepted, the collateralization process begins:
Asset Verification: The platform verifies the ownership and value of the tokenized RWA.
Collateral Lock: The borrower transfers the tokenized RWA to the Collateral Escrow smart contract.
Overcollateralization: To mitigate risk, loans are typically overcollateralized, with the collateral value exceeding the loan amount by 30-50%.
Collateral Monitoring: Throughout the loan term, the value of the collateral is continuously monitored using blockchain oracles.
Repayment and Default
Borrowers are responsible for repaying their loans according to the agreed terms:
Repayment Schedule: Borrowers make regular payments (e.g., monthly) through the platform.
Early Repayment: The platform may offer options for early repayment, potentially with reduced interest.
Default Process:
The borrower receives notifications and a grace period to rectify the situation.
If unresolved, the platform initiates the liquidation process.
The collateralized asset is auctioned to recover the outstanding loan amount.
Default Triggers: Failure to make timely payments or a significant drop in collateral value can trigger default procedures. Additionally, if the borrower fails to make agreed-upon payments on time, this will also initiate default procedures. Specifically:
Missed Payments: If a borrower fails to make a scheduled payment by the due date, it triggers a default event.
Collateral Value Drop: If the value of the collateralized asset falls below a predetermined threshold (e.g., loan-to-value ratio exceeds a certain percentage), it can trigger a default.
Repeated Late Payments: A pattern of consistently late payments, even if eventually made, can be considered a default trigger.
Violation of Loan Terms: Failure to comply with other specific terms of the loan agreement, such as maintaining certain financial ratios or meeting reporting requirements, can also trigger default procedures.
In any of these cases, the platform will initiate its default and liquidation processes to protect the interests of the lenders and maintain the integrity of the lending ecosystem.
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