😲Loan Default FAQ

What happens when a loan defaults?

When the loan duration expires, the loan is considered to be in-default.

The Harberger-Style Lending Auction ends, and refinancing is no longer possible by either Lenders or the Borrower.

The only possible outcomes of a defaulted loan are:

  1. The Borrower repays the Principal + Interest

  2. The Lender seizes the NFT collateral that backed the original loan

What can borrowers do?

Pay back the loan! Just because a loan is in default does not mean a borrower can not repay it to save their NFT from being seized.

Click on the β€œRepay” button on the defaulted Loan Card to make the repayment, or repay directly to the Lending.sol smart contract calling the Repay Loan function, repayLoan(nftContractAddress, nftId).

Do I have to repay from the same wallet I borrowed from?

No. Borrowers can make a full repayment from any wallet. After repayment has been received, the the NFT will then be returned to the wallet that initiated the loan (currently only available interacting directly with the smart contracts).

How much time do I have to make a full repayment after default?

Borrowers can make a full repayment up until the Lender calls the Seize Asset function.

Once the NFT has been seized by the Lender, and the Borrower loses their NFT collateral and the loan is considered "closed."

What can lenders do?

Lenders have the opportunity to seize the NFT offered as collateral for their loan. This is in exchange for the principal amount of money lost in the loan.

Lenders can seize the asset the block after expiration by calling the Seize Asset function seizeAsset(nftContractAddress, nftId) either on the NiftyApes Lender Dashboard or by interacting directly with the NiftyApes Lending.sol smart contract

Do I have to make the Seize Asset call from the same wallet that made the loan offer?

No. Lenders can make thie call from any wallet address (currently only available interacting directly with the smart contract).

Once the call has been initiated be deposited into the Lender’s originating wallet address.

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