Each of your outstanding loans will have a Loan Heath indicator, which reflects the risk level based on the outstanding loan balance and your deposited Collateral. You should monitor your loans and make repayments accordingly to improve your Loan Health.
Note: The figures in above screenshot are for illustrative purpose only.
A health score, which is based on your loan’s LTV and the defined thresholds, is provided to help you better manage your loan.
LTV < 50%
50% ≤ LTV < Margin Call LTV
Margin Call LTV ≤ LTV < Forced Liquidation LTV
For all standard loans, the LTV thresholds are defined as follows and may be subject to change.
Margin Call LTV
Forced Liquidation LTV
When Current LTV < Margin Call LTV
If your loan’s LTV is less than the Margin Call LTV (i.e. 70% for a standard loan), then your loan is healthy (i.e. GOOD, FAIR).
When Margin Call LTV ≤ Current LTV < Forced Liquidation LTV
If your loan’s LTV is greater than or equal to the Margin Call LTV (i.e. 70% for a standard loan), but less than the Forced Liquidation LTV (i.e. 85% for a standard loan), then your loan is unhealthy (i.e. CRITICAL). Forced Liquidation is likely to happen if the LTV rises further. A Margin Call will be triggered and you will receive email notifications regarding loan repayment. At this point, you cannot borrow additional loans.
When Current LTV ≥ Forced Liquidation LTV
Forced Liquidation will occur. If your loan’s LTV is greater than or equal to the Forced Liquidation LTV (i.e. 85% for a standard loan), our system will liquidate the entire corresponding Collateral to make a full repayment of your loan. After Forced Liquidation, all remaining liquidation proceeds will be deposited into your Crypto.com Exchange Spot Wallet. Please note that a Liquidation Fee will be applied.
If the liquidation proceeds are insufficient to cover the outstanding loan balance, we may require you to pay back the amount owed from your Spot Wallet. If the amount owed remains unpaid, Crypto.com may terminate the loan Agreement or prevent withdrawals from your Spot Wallet.