Renegotiations

What are Renegotiations?

In GONDI, renegotiations allow any lender to propose new loan terms for a borrower's outstanding loan, such as extending the maturity date or increasing the APR. These proposals require the borrower's acceptance, as the terms may not always be strictly better than the current ones, contrary to refinancing.

Loan renegotiations are available to everyone—not limited to the original lender(s)—and are typically used to extend outstanding loans approaching maturity. They offer more versatility than refinancing, allowing for any combination of terms. For example, a borrower might want to extend a loan in exchange for a higher APR and pay an origination fee.

Different than with refinances, renegotiations do require borrowers to accept the new offer.

How does it work?

After a lender makes an offer on an outstanding loan, the borrower must accept it for the renegotiation to execute. To do so, the borrower must first repay the accrued interest and any difference if the new principal is lower than the outstanding one. Borrowers do not need the full principal amount to accept renegotiation offers, only the delta in the principal plus any accrued interest.

Lock-ups for refinancing also apply after the borrower accepts a renegotiation offer.

New to GONDI V3

Borrowers may select collection-level offers as part of a renegotiation at any point in time.

New Tranches

Loans may add more junior tranches even after they have been originated if there are available offers. For instance, if the value of the NFT appreciates after the loan has started, lenders may choose to provide offers to increase the loan's principal as the most junior tranche.

Existing tranches of a loan cannot be renegotiated individually.

For a step-by-step guide on how to negotiate loans, visit How to Renegotiate a Loan

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Renegotiation vs. Refinancing

Renegotiation allows lenders to propose changes to the terms of outstanding loans, such as extending the due date, changing the interest rate, or offering more principal. This is not to be confused with refinancing, which allows lenders to instantly take over outstanding loans by lowering the APR.