⏰What is Loan Duration?

Loan Duration is one of the two factors which can lead to auto-liquidation of collateral assets! The other such factor is Liquidation Ratio. Please read carefully and understand this section.

Loan Duration is defined as the maximum time a particular Lender offers to the Borrowers to repay the loan (& accumulated interests) in full. This value is generally expressed in DAYS.

For example: If a Lender has defined 60 DAYS as the Loan Duration, that means, the Borrower must return the Principle + Interests within 60 days, failing which the system will auto-liquidate the collateral to close the loan.

For Lenders: One must mention Loan Duration while putting up a new ad. This will be displayed in the Ad Details section for everyone to see.

For Borrowers: Borrowers will be allowed to see the Loan Duration of every ad to make a wise choice.

Both parties need to understand, this data is immutable, so once the ad is live, nobody will be able to change this data.

Importance

Loan Duration required so that the Lender funds don't get stuck indefinitely. Thus, if a loan is marked with a limit of 180 days, the borrower must repay the loan in full, plus the interest, within 180 days of taking the loan.

If the borrower fails close a loan within the defined Loan Duration, the collateralised assets will be auto-liquidated and will follow the standard auto-liquidation process as explained above.