In general, there are 3 things a borrower should concern about when borrowing. Let's go through an example to be clear about them.
#1: The minimum collateral amount
- The exchange rate is 1USDT = 0.1991FXCE
- I want to borrow 1225.47 USDT ~ 6155.05 FXCE
- The Loan to value ratio is 80%
- So I need to collateralize at least 6155.05*100/80 = 7693.81 FXCE
Note**: If your balance is not enough to collateralize, you need to deposit money into Digital Banking.
#2: The risk of liquidation based on the Stop out level
- This loan is set with the Stop out level = 10%
- So, as the formula above, if the exchange rate doesn't change (still 1FXCE = 0.1991 USDT)
- If the value of the total loan amount (including principal & interest) >= 1378 USDT -> reach the Stop out level.
#3: The interest rate
The interest is updated every 4 hours.
If the interest rate is 12.04%/year (as shown above)
- Interest rate/4 hours will be (0.1204/365/24)*4 = 0.000055 = 0.0055% (as shown above)
- After 6 terms (24 hours from 28/12/2021 15:09)