Renegotiations
What is Renegotiation?
Renegotiation = Flexible Loan Changes (Borrower Approval Required)
Renegotiation lets any lender propose new terms for a borrower's existing loan - like extending the due date, changing the APR, or adjusting the principal. Unlike refinancing, the borrower must approve because terms might not always be better.
Refinancing vs Renegotiation - Key Differences
Automatic (no borrower approval needed)
Requires borrower approval
Only better terms allowed
Any terms allowed (better or worse)
APR must improve by 10%+
APR can go up or down
Cannot shorten due date
Can extend or shorten due date
Instant when offered
Borrower chooses whether to accept
How Renegotiation Works
Any lender makes a renegotiation offer on a borrower's loan
Borrower reviews the proposed terms (could be better or worse)
Borrower decides whether to accept or decline
If borrower accepts: Borrower pays any required amounts upfront, terms change immediately
Lock-ups reset: New 15% refinancing restrictions based on new loan duration
What Borrowers Pay When Accepting
Always pay:
All accrued interest to date
Additional payments depend on principal change:
Principal decreases: Borrower pays the difference
Principal increases: Borrower receives extra funds (minus accrued interest and any origination fee)
Principal stays same: Only pay accrued interest
Example:
Current loan: 10 WETH principal, 0.5 WETH accrued interest
Renegotiation: 12 WETH principal, 0.2 WETH origination fee
Borrower receives: 2 WETH increase - 0.5 WETH interest - 0.2 WETH fee = 1.3 WETH
Types of Renegotiation Offers
Item-Specific: New offers made specifically for the borrower's NFT
Collection-Level: Borrowers can accept any active collection offer as renegotiation terms
Adding New Tranches
Any time during a loan, lenders can offer additional junior tranches (Top Up) to increase the borrower's principal. This gives borrowers access to more funds if their NFT's value has increased.
Common Renegotiation Scenarios
Extending maturity: Loan due soon, borrower wants more time (may pay higher APR)
Increasing principal: Borrower's NFT gained value, wants to borrow more
Last updated