When can Collateral be Withdrawn?

BTC Credit enables a borrower to provide Bitcoin as Collateral, and the procedure for repayment of collateral is pretty basic. Once the contract is executed, with all interest installment payments duly made, and principal amount returned, the borrower can make a request to withdraw their collateral, and process shall be executed and immediately completed.

In another case, the borrower may pre close an existing contract that is yet to be completed. In order to withdraw the collateral, they must pay the complete Principal amount along with 5% interest. This can only be done on the fourth or 4+nth installment, and borrower must compulsorily have paid 3 continuous installments.

When can Collateral not be Withdrawn?

In a situation where the borrower defaults at the date of installment, the contract reminds the borrower providing a grace period of three days. If the borrower pays the installment within the grace period,no fine is charged. But if she misses the payment even after grace period, then a fine will be charged for the particular installment only.. In case the borrower missed 3 consecutive installment payments along with grace periods, the smart contract executes and declares the borrower as a defaulter and the collateral provided by her is confiscated. This amount is then paid to the lender.

How is Collateral Settled?

Smart Contracts enable dispute resolution and payment settlement. In the initial terms of loan, the smart contract is used to code the exact details of interest payments and settlement facilitation. In case of missed payments, this smart contract is used to settle the collateral payment.

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