How to take your first loan on Yield Credit?
Glad you asked. In this tutorial I will show you how to request a loan or how to borrow from the list of pending offers.
Let's get into it 👇
How To Take Out Your First Loan on Yield Credit
To access the platform, simply head over to https://app.yield.credit/, and you will be greeted with the following screen;
As we want to borrow today, simply hit borrow on the top to bring up the following screen. This will show all currently available loans that are being offered.
At this point, we have two options to take out a loan. Option A is to select one of the loans already on offer. Or Option B is to create a new borrowing request on your own terms.
Option A - Borrowing From the Selection of Loans Already Offered
When you first hit borrow, you are automatically presented with the entire selection of loans that different lenders have put on offer for borrowers;
You can easily see all of the loans available that lenders have put up for you to borrow. Let’s take a closer look at the highlighted loan offer as an example;
- Box 1 - Shows the principal that the lender will loan to us. If we were to take out this specific loan, we would receive 400 LINK, worth $12,298.
- Box 2 - Shows us how much interest we would need to pay to take out this loan. Here, it will cost us 10% of the loan size, which is $1,229.
- Box 3 - Shows us the reward we receive when we pay back the loan. The platform will mint 3.5 YLD for the loan, worth around $449.30 today.
To gather more details on the loan, simply click the loan of interest to bring up the following screen;
This screen shows us more details about the loan we are interested in.
- Box 1 - Shows us the YLD reward we receive when we repay the loan.
- Box 2 - Shows us how much LINK we will receive if we take out this loan. In this case, we would be borrowing 400 LINK.
- Box 3 - Shows the interest to be paid on the loan. In this case, it is 10%.
- Box 4 - Shows us the duration of the loan. In this case, we must repay the loan (and interest) within 10 days.
- Box 5 - Allows us to choose what collateral we would like to put up. You can click on “DAI” to change it to any of the tokens the platform allows you to use. There are 30+ in total so far. You can then change the slider to adjust the liquidation ratio for your comfort.
- Box 6 - If you are happy with the loan terms, and the size of the collateral simply hit Borrow to take out the loan.
If you are not satisfied with the already offered loans, you can simply go ahead and use Option B, which is creating a new borrowing request.
Option B - Creating A New Borrowing Request
Option B allows a borrower to request a loan if they don't see one that fits their needs, or if they would like to set the terms of the loan themselves.
To set this up, simply hit the “+” button on the “Borrow” page;
This will bring up the following screen, which allows you to adjust each characteristic of the loan;
Here, we need to edit each section of the borrowing request to suit our needs;
- Box 1 - This is the principal loan that we wish to receive. In this example, I have set it to 0.55 WETH, worth around $1,000. Here, you can choose any of the 30+ token options of the platform.
- Box 2 - This is the YLD reward we will receive when we pay back the loan. Remember, we are the borrowers here and, therefore, are entitled to the YLD printed when the loan is repaid. As you can see, for this loan amount, we would earn 0.1 YLD as a reward.
- Box 3 - This is the interest that we are willing to pay to the lender who fills the loan. I have set my loan to 2%.
- Box 4 - Is the duration of the loan. It can be anything from 10 days to 60 days. I went for 20 days.
- Box 5 - This is the collateral that we are willing to put up for the loan. In this example, I have chosen AMPL as the collateral. Again, it can be any of the 30+ tokens that are already on the platform. You can see that I have chosen to go for a collateralization ratio of 220%, meaning I have to lock away 2,180 AMPL tokens for this loan. This means that my liquidation price is at $0.69, and if AMPL was to drop beneath there, the lender could take my collateral to protect himself.
- Box 6 - Hit this when you are ready to create the borrow request.
After hitting “create,” the platform will present you with the following screen to confirm that you want to send out this borrowing request. It will also show you the cost of the platform fee, currently set at 1% of the principal loan value. The platform fee for this current loan is 9.91 AMPL. Simply click the highlighted check box;
This will bring up a separate MetaMask window. The first window will ask you to give permission to allow Yield Credit to use the AMPL that you put up for collateral;
Check that you are happy with the transaction fee, and then hit confirm.
Once that transaction has been mined, another MetaMask notification will pop up for you to create the actual loan contract.
Beware, as we are creating a contract on the Ethereum network, transaction fees for this will be quite high - especially with the current load on the Ethereum blockchain right now;
Here, you can see that the fee for setting up this loan was around $125. If you are happy to pay the fee, simply hit confirm.
Once that transaction has been confirmed, the loan request is now live. You will be redirected to the Profile page on Yield Credit, where you will see the borrowing request you have just created;
You can click the borrowing request to see the details of it again;
As you can see, we are now waiting for a lender to fill the 0.55 WETH we have requested.
You will also see the borrowing request you created on the “Lend” section of the dashboard. Lenders can easily come to this section to see if they would like to fill it for you;
Now, you have just to wait to see if your borrowing request is a good opportunity for a prospective lender.
After a lender has filled the borrowing request for you, the WETH will automatically be credited to your MetaMask wallet. The borrowing request will also turn green on your profile;
Once again, you can click the loan to bring up further details about it;
If the price of your collateral, in this case, AMPL, starts to drop and reaches near the liquidation price, you have the option to “Top Up” the loan and add more AMPL collateral to stop it from being liquidated. Alternatively, you can choose to repay the loan at any time.