For Borrowers

Creating a Loan

Getting Started as a Borrower

As a borrower, you can get USDC loans by locking up your cryptocurrency as collateral. Here's how to create your first loan:What you need:

  • A Web3 wallet (like MetaMask)

  • Collateral tokens you want to lock up

How to Create a Loan

  1. Prepare Your Collateral

  • Choose which tokens you want to use as collateral

  • Make sure you have enough tokens to cover your loan amount

  • Consider the collateral ratio (how much collateral vs loan amount)

  1. Set Your Loan Terms

  • Loan Amount: How much USDC you want to borrow

  • Collateral Amount: How much of your tokens to lock up

  • Interest Rate: The total amount you'll pay back (principal + interest)

  • Funding Duration: How long lenders have to fund your loan

  • Repayment Duration: How long you have to repay after getting funded

  1. Create the Loan

  • Click "Create Loan"

  • Enter all your loan parameters

  • Approve the collateral transfer in your wallet

  • Your collateral gets locked in the smart contract

  • Your loan goes live for lenders to fund

Understanding Loan Terms

Collateral Ratio:

  • This is how much collateral you lock vs how much you borrow

  • Higher collateral = safer for lenders = easier to get funded

  • Example: Lock $2000 worth of tokens to borrow $1000 USDC

Interest Rate:

  • Set the total amount you'll pay back

  • Example: Borrow 1000 USDC, pay back 1100 USDC (10% interest)

  • Higher interest attracts more lenders

Deadlines:

  • Funding Deadline: When lenders stop funding your loan

  • Repayment Deadline: When you must repay the loan

  • Claim Extension: Extra time to claim funds after funding ends

Tips for Creating Successful Loans

Set Realistic Terms:

  • Offer competitive interest rates

  • Provide adequate collateral (150-200% of loan amount)

  • Set reasonable deadlines (1-7 days for funding, 30-90 days for repayment)

Choose Good Collateral:

  • Use stable, widely-accepted tokens

  • Avoid highly volatile tokens

  • Consider the current market value

Be Transparent:

  • Set clear repayment terms

  • Consider your ability to repay

  • Don't borrow more than you can afford

Managing Your Loan

Claiming Your Funds

Once your loan gets funded:

  1. Check Funding Status

  • See how much has been raised

  • Check if the funding deadline has passed

  • Verify the loan state is "Funded" or "Fundraising"

  1. Claim Your USDC

  • Click "Claim Funds" on your loan

  • Receive the raised USDC in your wallet

  • Your loan state changes to "Borrower Claimed"

Important Notes:

  • You can claim even if the loan isn't 100% funded

  • You must claim within the extension period

  • If you don't claim in time, the loan gets liquidated

Repaying Your Loan

When it's time to repay:

  1. Calculate Your Payment

  • You owe the raised amount plus interest

  • Plus any protocol fees

  • The amount is prorated if you didn't get 100% funding

  1. Make the Payment

  • Click "Repay Loan" on your loan

  • Approve the USDC transfer in your wallet

  • Your collateral gets returned to you

  • Lenders can claim their repayment

Example:

  • You borrowed 1000 USDC

  • You owe 1100 USDC (1000 + 100 interest + fees)

  • Pay 1100 USDC → Get your collateral back

If You Can't Repay

What happens:

  • The loan gets liquidated after the deadline

  • Lenders receive your collateral instead of USDC

  • You lose your collateral tokens

Avoiding Default:

  • Set realistic repayment terms

  • Monitor your collateral value

  • Have a backup plan for repayment

Cancelling a Loan

You can cancel your loan before claiming funds:

  1. When You Can Cancel

  • Before the funding deadline + extension period

  • If you change your mind about the loan

  • If you need to adjust terms

  1. What Happens

  • You get most of your collateral back

  • A small rejection fee goes to lenders

  • Lenders get their USDC back

  1. Rejection Fee

  • 5% of your collateral if loan was >10% funded

  • No fee if loan was <10% funded

  • Fee is distributed to lenders

Common Scenarios

Scenario 1: Fully Funded Loan

  • You create a loan for 1000 USDC

  • Lenders fund the full amount

  • You claim 1000 USDC

  • You repay 1100 USDC

  • You get your collateral back

Scenario 2: Partially Funded Loan

  • You create a loan for 1000 USDC

  • Lenders only fund 500 USDC

  • You claim 500 USDC

  • You repay 550 USDC (prorated)

  • You get your collateral back

Scenario 3: Defaulted Loan

  • You can't repay on time

  • Loan gets liquidated

  • Lenders get your collateral

  • You lose your collateral tokens

Scenario 4: Cancelled Loan

  • You cancel before claiming

  • You get 95% of collateral back

  • Lenders get 5% rejection fee

  • Lenders get their USDC back

Important Notes

Timing is Critical:

  • Claim funds within the extension period

  • Repay before the repayment deadline

  • Monitor your loan status regularly

Collateral Safety:

  • Your collateral is locked until loan completion

  • You can't withdraw collateral while loan is active

  • Only you can claim or cancel your loan

Fees:

  • Protocol fees are taken from interest

  • Gas fees apply to all transactions

  • Rejection fees apply to cancellations

Partial Funding:

  • You can claim partial funding

  • Repayment is prorated to what you actually received

  • This gives you flexibility if full funding isn't achieved

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