Hi, Thanks for your response.

Unfortunately, I think this rational is still not fair to the lender. I'll give you an example with my loan:

 

* Loan Amount: $4400.00
* Issue Date: Nov. 8, 2019
* Loan Term: 1 year @ 15.5% Interest-Only
* Expected Interest: $682.00
* Early Repayment 50% Interest: $341.00
* Interest actually received: $56.84
* ***Interest Due to reach 50%: $284.16***

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In the case of my loan above, CoinLoan took a $44 origination fee from the borrower and then an additional 5% liquidation fee on the collateral.

Your website does not explicitly say at what LTV % that liquidation occurs, but it does say that at 80% it becomes a liquidation risk. I'll generously assume the liquidation occurs at 80%. So with my loan, when the borrowers collateral was at 80% LTV, or $5,500, liquidation occurred. The 5% liquidation penalty would be $275.

So as you can see, the borrower will save money by allowing liquidation to happen rather than just paying off the loan early. Fur

 

Thanks for your extensive comment! We understand your position, but it isn’t possible for the CoinLoan business model to absorb the update you suggest.

Our main task as a peer-to-peer platform is to balance the interests of both lenders and borrowers. If we bend the rules of the game in favor of one party, the other will leave the platform to find better conditions elsewhere. Inequality will result in low liquidity of the market and losses for lenders as well.

The moment of liquidation is painful for both. Lenders, as you say, lose money waiting for the new loan, and the potentially worse loan conditions. Borrowers take the main risk, as they lose their crypto-assets and pay 5% liquidation fee. That’s why we consider a 50% interest prepayment policy you propose unfair for borrowers.

An example may clarify this point.

**Loan Summary**  
Loan Amount: 1000 USDT

Term: 3 years

Interest Rate: 14%

LTV: 70%

Estimated Interest Amount: 420 USDT

**Liquidation** **Scenario**

Let’s ass

As a lender, a few of my loans were liquidated last night due to the drop in the market. 

I'm not super happy with the liquidation policy. I only got a small amount of interest for the short time that the loans were out, but I think the liquidation policy should match the prepayment policy.

For example, I had three long term loans out for a good interest rate, that were less than 50% paid off. So when the collateral was liquidated, I should expect an early prepayment of 50% of the interest amount. 

Right now I will lose money waiting for the money to be lent out again, and also possibly lose money by getting a lowered interest rate. 

I urge an update to this policy. Thanks

Collateral liquidation