Default and Risk Management

What Constitutes Default

You are in default if any of the following occur:

LVR-Related Default

Your LVR meets or exceeds 85%
You missed an interest repayment after 30 days grace period

Default Process

Step 1: Default Notice

Vield issues a Default Notice specifying:

The reason for default
The outstanding amount owed
Actions required to remedy the default
Timeframe to remedy: Typically 30 days

Step 2: Remedy Period

During the remedy period, you can:

Pay down the loan: Full or partial repayment to bring LVR to 50% or lower
Pay down the interest: Full repayment of outstanding interest
Add collateral: Deposit additional BTC or ETH to lower LVR
Use collateral to pay: Authorize Vield to sell crypto to cover the debt

Step 3: Notice Void Condition

If your LVR improves to 50% or lower during the remedy period (for example, due to crypto price increase), the Default Notice becomes void and your loan returns to good standing. Vield will notify you immediately.

Step 4: Enforcement

If the default is not remedied within the specified timeframe, Vield may:

Take possession of the Security
Sell or retain the Security to recover the outstanding debt
Charge enforcement expenses (collection costs, legal fees on full indemnity basis)
Terminate your loan agreement

Notice to Sell Option

You may reach out to Vield selling your crypto before your LVR reaches 85%. This prevents default and protects your remaining collateral.

To enable: Contact support@vield.io to set up automatic selling parameters (e.g. sell when LVR reaches 80%).

How to Avoid Default

Proactive Monitoring

Check LVR daily during volatile markets
Set up price alerts for BTC on external platforms
Enable push notifications in the Vield app

Maintain a Buffer

Borrow less than maximum: Aim for 40-45% LVR instead of 50%
Keep funds available: Set aside AUD or additional crypto for emergencies

Respond to Warnings

65% LVR warning: Consider adding collateral or paying down debt
70% LVR warning: Strongly recommended to take action
75% LVR repayment notice: Recommend you take action within 1 day
85% LVR Loan Default: 30 day window to remedy the loan by bringing the LVR down to 50% (Commercial loans do not have a 30 day window)

Make Timely Payments

Set calendar reminders for quarterly interest payments
Automate if possible: Consider setting up recurring transfers

Risk Factors

Market Volatility Risk

Cryptocurrency markets are highly volatile. Your collateral value can drop significantly in short periods, rapidly increasing your LVR.

Mitigation: Maintain a low initial LVR (below 45%), monitor daily, and have funds ready to add collateral.

Liquidity Risk

Your crypto is locked as collateral. You cannot access it until the loan is fully repaid, even if you need it for emergencies.

Mitigation: Only use crypto you can afford to lock up. Keep other assets available for emergencies.

Opportunity Cost Risk

If crypto prices rise significantly, your locked collateral appreciates in value, but you cannot sell it without repaying the loan.

Consideration: Weigh the benefit of liquidity now against potential future gains.

Enforcement Expenses

If you default, you may be charged reasonable enforcement expenses including:

Costs in preserving, maintaining, or selling your collateral
Collection expenses
Expenses from dishonored payments
Legal cost and expenses (on a full indemnity or solicitor-client basis (whichever is higher)
Internal cost related to your breach or default
Late repayment fee

These expenses are added to your Total Outstanding Balance. They will not exceed reasonable enforcement expenses.

Getting Help

If you're struggling to manage your loan:

Contact Vield early: support@vield.io or (02) 9157 9669
Be proactive: Don't wait until 85% LVR or a Default Notice
Explore options: Discuss payment arrangements or other solutions
Seek financial advice: Consider consulting a financial advisor or credit counselor

External Support:

Australian Financial Complaints Authority (AFCA): www.afca.org.au
National Debt Helpline: 1800 007 007