Borrow xBANK

Flexible Loans with Credit Rank-Based Interest Rates

Borrow xBANK offers users the opportunity to obtain loans by mortgaging assets such as ETH, USDT, and more. The interest rate for borrowing xBANK varies depending on the user's credit rank. BaseBank employs a credit rank system consisting of five ranks, each with its own associated interest rate:

Credit Rank	Credit Points Range	Interest Rate per Day
Very poor	300 - 579	1%
Fair	580 - 669	0.9%
Good	670 - 799	0.8%
Very good	790 - 799	0.7%
Exceptional	800-850	0.6%

Learn more about Credit Rank and how to earn Credit Points here

Users who do not have a credit rank can still borrow xBANK by providing collateral. In such cases, the default interest rate will be 1% per day. This flexibility allows users to access loans based on their creditworthiness or collateral, providing options for individuals with varying financial backgrounds.

It is important to note that users must repay their loans in full before they can utilize the Redeem feature. The Debit balance, which includes the loan amount and accrued interest, must be fully paid to execute the redeem xBANK to $BANK command. The loan interest increases over time until it is paid off.

Debit balance

The formula to calculate the Debit balance is as follows:

Debit balance = Loan amount + Loan's Interest

The interest rate for a loan is fixed once the loan order is executed. For example, if a user executes a loan order while holding a Good credit rank, the interest rate of 0.8% per day will be applied until the debt is fully repaid.

If a user borrows a loan while at the Good credit rank and later moves up to the Very good rank, the loan will still retain the interest rate associated with the Good rank. However, any new loans incurred after achieving the Very good rank will be calculated based on the interest rate of the Very good rank.

Once the loan is fully repaid, the collateral will be returned to the user's account after a period of 3 days. This time frame ensures the stability of the system and the ecosystem by mitigating fraud and security risks.

Loan Liquidation: Ensuring Safety in Collateralized Loans

In the context of borrowing xBANK within the BaseBank ecosystem, loan liquidation is a mechanism implemented to protect the lender's assets and ensure the safety of the lending process. The loan rate determines the maximum value of xBANK that can be borrowed, which is set at 90% of the value of the collateral provided by the borrower.

By allowing borrowers to borrow up to 90% of their collateral value, BaseBank enables users to access a significant portion of their assets while still maintaining a level of security for the lender. However, it's important to note that higher loan rates correspond to higher risks. Borrowers should carefully consider the loan rate they choose, taking into account their risk tolerance and ability to repay the loan.

Loan liquidation comes into effect when the value of the collateral changes in relation to the value of the xBANK borrowed or vice versa. If the value of the collateral decreases and reaches the value of the xBANK borrowed, or if the value of the xBANK increases and reaches the value of the collateral, the loan will be liquidated.

The purpose of loan liquidation is to safeguard the lender's assets in the event of significant fluctuations in the value of the collateral or xBANK. By liquidating the loan, the lender can recover their funds and mitigate potential losses caused by unfavorable market conditions or unforeseen circumstances.

The liquidation process typically involves the sale of the collateralized assets in the market to cover the outstanding loan amount. This ensures that lenders are protected and their investments are not jeopardized by drastic changes in the value of the collateral or xBANK.

BaseBank implements loan liquidation as a precautionary measure to maintain the integrity and stability of the lending ecosystem. It serves as a safeguard against potential risks and promotes responsible borrowing practices within the platform.

Activity Term for New Loan with Existing Old Loan:

When a user decides to make a new loan while an old loan still exists, there are specific terms and actions that come into play. In this situation, the amount of xBANK borrowed from the new loan must be greater than or equal to the outstanding balance of the old loan. This ensures that the new loan amount is sufficient to cover the remaining debt from the previous loan.

Upon borrowing the new loan amount, the system automatically deducts the borrowed xBANK from the new loan to pay off the balance of the old loan. This ensures that the outstanding debt is settled and the borrower's obligations are fulfilled. After the deduction is made, the remaining xBANK, if any, will be transferred to the borrower's xBANK account balance.

Benefits and Purpose of the Activity Term:

This activity term serves multiple purposes. Firstly, it helps streamline the loan repayment process by consolidating the old loan and the new loan into a single transaction. By automatically using the new loan amount to settle the outstanding debt, borrowers can easily manage their loan obligations without the need for separate repayments.

Additionally, this activity term helps borrowers avoid potential complications or confusion that may arise from having multiple active loans simultaneously. By prioritizing the repayment of the old loan, BaseBank ensures that borrowers focus on fulfilling their existing obligations before taking on additional borrowing.

Furthermore, this activity term contributes to the overall stability and integrity of the lending ecosystem. By automatically paying off the old loan with the new loan amount, BaseBank maintains a balanced lending environment and avoids situations where borrowers accumulate excessive debt without fulfilling their repayment responsibilities.

Importance of Awareness and Responsible Borrowing:

It is important for borrowers to be aware of this activity term when considering new loans while having an existing loan. By understanding that the borrowed xBANK will be used to pay off the old loan balance, borrowers can make informed decisions and manage their finances responsibly

In short: When a borrower initiates a new loan while an old loan still exists, the amount of xBANK borrowed from the new loan must be sufficient to cover the outstanding balance of the old loan. The system automatically deducts the new loan amount to pay off the old loan, and any remaining xBANK is transferred to the borrower's xBANK account balance. This activity term simplifies the repayment process, ensures responsible borrowing practices, and contributes to the stability of the lending ecosystem within BaseBank.