1. What is Fixed Rate Loan?
Fixed Rate Loan is a loan product with fixed investment terms and fixed interest rate. Compared with loan products with flexible interest rates, its strength lies in the fixed interest rate. Currently, Gate provides 7-Day and 30-Day Fixed Rate Loan products.
2. Are there single-collateral fixed rate loan products?
Fixed Rate Loan products are currently all multi-collateral, but when you choose a single coin, you are borrowing a single-collateral loan.
3. How is the interest of fixed rate loans calculated?
The fixed interest rate is the actual market interest rate at the time of succesful borrowing. During the loan term, this rate stays unchanged. Interest is calculated based on the loan amount and the fixed interest rate every hour on the hour. You can repay the loan in advance, and the interest will be calculated based on the actual loan period. Early repayment will not incur any penalty.
4. Is Auto Repay available on fixed rate loans?
Yes. Enable Auto Repay and the system will automatically transfer spot assets to repay your loans at maturity to avoid overdue repayment. Please note that if you do not have enough spot account balance, overdue loans could still occur.
5. Is Auto Renew available on fixed rate loans?
Yes. Once you enable Auto Renew, a borrowing order will be placed automatically after this order reaches maturity. The interest rate of the new order will be the latest interest rate in the borrowing market, which could vary from the original one, but the investment term will not change. For example, if you subscribe to a 7-Day fixed rate loan product, after the auto-renewal, the new loan order will be a 7-Day fixed rate loan order with the latest interest rate in the market.
6. What happens if the loan is overdue?
If you haven't enabled Auto Renew before maturity or fail to repay the outstanding loan amount at maturity, your loan will be overdue. Under such circumstances, you will have a grace period of 48 hours (the hourly interest rate will be 3 times the original one). However, if you still do not repay all the outstanding amount after 48 hours, your collateral will be sold for repayment. And 2% of your repayment will go to the insurance fund to make up for the platform's losses caused by bankrupt isolated margin traders.
7. What happens if the LTV of the fixed rate loan order hits the liquidation LTV?
As fixed rate loan orders are all multi-collateral, the liquidation mechanism is the same as that of multi-collateral loans. When your LTV hits 90%, the system will liquidate the position through phased reduction, which means your collateral will not be liquidated at once. Instead, it will be liquidated in the descending order of the value of outstanding loan (principal plus interest). The loan with the largest value will be dealt with first. The rule also applies to selling different collateral. The platform will check the LTV after each sale to see if the LTV is back within the liquidation LTV. If yes, the liquidation will stop; otherwise, it will continue.
8. Are there notifications when an alert or liquidation is triggered?
Yes. You will receive a direct message and a notification email when an alert or liquidation is triggered. Moreover, we will also send you notifications when your loan is about to reach maturity, auto-repaid, auto-renewed or overdue.
9. What happens when liquidation is triggered?
There are two scenarios after a liquidation is triggered:
- When the LTV hits 90%, the system will liquidate the position through phased reduction;
- If you haven't enabled Auto Renew before maturity or fail to repay the outstanding loan amount at maturity, your loan will be overdue. Under such circumstances, you will have a grace period of 48 hours. However, if you still do not repay all the outstanding amount after 48 hours, your collateral will be sold for repayment.
When all the collateral has been sold, 2% of your repayment will go to the insurance fund to make up for the platform's losses caused by bankrupt isolated margin traders.
Gate reserves the final right to interpret the product.
