Num Finance loans are an innovative product for the region and allow all users to issue a Num-S directly with us. If you need money, you don’t have to sell your cryptocurrency savings, just leave them as collateral and you’ll receive the necessary tokens. Use your loan however you want: make crypto purchases, exchange it for fiat money, and spend it as you wish. Num Finance seeks to offer access to credit in simpler ways as a solution in Latin America. This challenge is crucial in the face of a scenario with high rates and complex systems.
For several months, it was only possible to apply for loans in nuARS, but this week, after its launch, loans in nuPEN were also enabled. The new rates promise to be attractive for the system: from 5% for nuPEN and from 53% for nuARS.
The structure of the loans consists of collateral that is left as a guarantee and enables a line of credit for the user to take one of the active Num-S. The user chooses the term for which they want to maintain the loan and once it is completed, the amount of Num-S is paid in a single installment to release the collateral and access the assets you left.
• Amount: Users choose the amount in Num-S they wish to receive. The minimum amounts that can be requested for nuARS and nuPEN are 500,000 and 5,000 respectively.
• Term: One of the novelties of the loan structure is that terms are now flexible. Users can choose to take Num-S for a term between 60 and 360 days or 60 and 180 days depending on the currency.
• Interest: The interest payment is made in full at the beginning of the loan as a discount rate. The applicable rate varies depending on the term of the loan. For loans in nuARS, the rate for loans with a term between 60 and 120 days is 53%. From 121 to 180 days, the rate increases to 55%. In the case of nuPEN, if a term between 60 and 180 days is selected, the interest is 5%. Similarly, the rate increases to 6% if the term is from 181 to 360 days. The interest is deducted by Num Finance from the final amount to be transferred to the user and is calculated on a 360-day basis. Therefore, if a user requests a loan for 500,000 nuARS, they will receive that amount less the interest payment.
• Collateral: The different assets that can be selected as collateral to deposit are BTC, ETH, BUSD, DAI, and USDC. The first two have a collateral ratio or “loan to value” of 150%. The collateral ratio for all dollar stablecoins is 120%. That is, it is necessary to leave a little more collateral than the requested amount. In the case of requesting a loan for an amount equivalent to $100 and the requested collateral is DAI, an amount equivalent to $120 should be left as collateral.
• Liquidation threshold: Loans have a liquidation threshold of 110%. Once it falls below the threshold, the loan is liquidated. Users will receive prior notice to add more collateral or repay the loan in advance.
This operation may not be available to users all the time.