Default is when a borrower fails to meet their obligations under a loan agreement. Most often, this means not paying interest or the principal on time. In some cases, default can also mean breaking other terms of the contract, such as not maintaining collateral or violating compliance rules.
Here’s what happens when a loan enters default on 8lends:
Trigger: A repayment delay of 90+ days automatically counts as a default, and the loan becomes frozen.
In this case, we sell the collateral pledged by the borrower at the time of signing the agreement. Once the collateral is sold, the proceeds are returned to investors.
We also have Maclear’s Provision Fund. It is filled with Maclear’s own funds, earned through services provided to customers and commissions from successfully funded projects. 2% from each project funded is transferred to the Provision Fund. This fund helps protect investors from defaults, ensuring they still receive principal and interest payments even if a borrower defaults or delays.
8lends has had zero defaults so far. Maclear has had only one default in over five years. Although the borrowing project failed, all investors were fully repaid from the liquidated collateral, resulting in zero losses.