If the value of your collateral drops significantly, your loan’s LTV ratio increases, raising the risk of collateral liquidation:
Monitoring and Alerts:
- Notifications: Ledn sends an email when your LTV exceeds 70%, advising you to add more collateral or repay part of the outstanding balance.
- Additional Reminders: Further alerts follow if your LTV reaches 75%.
Action Required:
- Top-Up or Repay: Deposit additional collateral or repay the loan in full or partially.
- Automatic Liquidation: If the LTV exceeds 80%, Ledn will automatically sell part of your collateral to cover the outstanding loan. This process is irreversible, and any remaining collateral is sent to your Transaction Account.
Proactive Management: We strongly recommend that you regularly monitor your LTV and add more collateral even before reaching 70% LTV. Also consider enabling Auto Top-Up to remove the need to manually monitor and manage your open loans’ status during times of price volatility.