🔁Repay
Last updated
Last updated
Repaying a Loan on DecentraCredit is as easy as taking a loan on DecentraCredit.
Go to the all-inclusive Dashboard. <Link>
Move to Borrowing section. You will be shown all the open (outstanding) loans like shown in the screenshot.
Clink on 'Repay' button for any loan you want to repay. Note: Both Full and Partial repayment are possible. But Collateral will be released only after full repayment of a loan. For a detailed explanation, check <link> The following window will open.
You can manually input how much you want to repay or simply click on Max. Clicking on Max will fill the box with the exact amount you need to repay to completely close the loan and get your collateral back.
Click on Repay. Bingo!
DecentraCredit allows the borrowers to repay the loan in partial installments. The process is exactly same as described above. What happens in the background, though?
Lets understand using an example.
Let's talk about a fictituos loan of 100 USDT which has accumulated 20 USDT as interest. The borrower wants to repay 50 USDT right now. Once he pays this 50 USDT, the system will wipe out equal percentage (%) of Principle and Interest. In this example: Total Outstanding is 100 + 20 = 120 USDT
50 USDT is (50*100)/120 = 41.67% (apprx)
Thus, 41.67% will be reduced from both the Principle amount as well as the outstanding Interest.
Using digits, (41.67% of 100) = 41.67 USDT will be wiped from Principle & (41.67% of 20) = 8.33 USDT will be reduced from the outstanding Interest.
Thus, the new balance would be,
Principle Borrowed = 100 - 41.67 = 58.33 USDT
Outstanding Interest = 20 - 8.33 = 11.67 USDT
Note 1: The new interest will be calculated for this new Principle Amount (58.33 USDT in our example).
Note 2: When need be, system will round off amounts, to avoid infinite looping issue or Transaction Failure issue. In our example itself, 41.6666.... was rounded off to 41.67 to mitigate recurring decimal issue.
