How Installments Work?

Here is how the installments work on the decentralized application:

1. Installment count:

By moving the installment count, the borrower can amount of instalments to be paid. For example 5 installments counts means that the loan will be repaid with 5 portions. Therefore, the whole loan amount and premium is divided by 5.

2. Installment period (days):

Installment period means the period until the next installment. In the current example, 10 days means that every installment needs to be paid within 10 days. Since in the example, here is 5 installment counts and 10 days, the whole loan period is 5 x 10 = 50 days, which needs to be paid by installments every 10th day.

What happens if your do not pay on time?

If the borrower misses an installment, additional 5% of the installment amount is added as a penalty fee. However, the lender can claim tokens only when the whole loan period is over and the whole loan amount + premium (interest) is not paid or lender can claim tokens when the collateral value drops to 100% or less compared to the loan amount.