We’re glad to announce that Loanbase is the largest Bitcoin lending platform to utilize the services of a collection agency in order to pursue delinquent borrowers. We’re happy to take this monumental step and to demonstrate the leadership necessary to be the best one in the space! An important thing to note here is that there will be some changes, which are the result of our work with the collection agency.
- All delinquent loans will be sent to the collection agency, which will then pursue all legal means of collecting the debt.
- Lenders will no longer receive the notice of default while the collection agency is attempting to collect. This is necessary, because the collection agency has requested that there are no simultaneous collection efforts which may interfere with their collection process.
- Once the collection agency has exhausted all means of collection, then and only then will the notice of default be issued to the lenders.
- The borrowers will be given 30 days to repay their late loan. If the borrower fails to repay, then their loan will be handed over for collection. They will also receive 3 notices warning them that the loan will be sent to collection.
Yes. We’ve handed over all of the delinquent loans, so the collection agency will try to collect on the old loans as well.
The collection agency performs collections in over 90 different countries, so most of the countries would be covered. However, they will not be doing any collection in the United States. Please be extremely careful when lending to borrowers in the US!
Will the collection agency take legal action against borrowers?
The collection agency works with lawyers in every country they operate in. If a borrower is unwilling to pay, then the collection agency has the ability to take legal action against the borrower.
How much will this cost lenders?
At this stage the collection agency will take 35% of the loan amount for any successful collection. We may be able to negotiate lower fees in the future. When a borrower posts a payment on a loan in collection, the lenders will notice a payment from the borrower and a separate transaction (collection fee) which debits their account. The collection fee is send directly to the collection agency.
Will Loanbase still keep its fee on collected loans?
Loanbase will not keep its full fee in case of collection. We are also going to be paying 35% of our fees we to the collection agency. As always, we are siding with the lenders and we only get revenue when the lenders do.
How will I know if the loan is in collection?
The collection efforts will be reflected via the payment statuses: “In Collection”, “Collected” and “Charge Off”. When a loan is currently being worked on by the collection agency, it’s marked as “In Collection”. If the borrower repays the loan, then the payment status will be marked as “Collected.” Once the collection agency exhausts all of their collection efforts, the payment status will be marked as “Charge Off.”