What Happens If You Miss a Payment
BitLease's LTO model is entirely payment-based. Your contract continues as long as you make your installment payments. But if a payment is missed, a structured penalty process begins. Understanding how this works helps you stay in control and avoid contract termination.
This article explains the penalty logic, what triggers termination, and what happens to your asset if a contract terminates.
How the Penalty System Works
If an installment is not paid by its due date, a 10% daily penalty is applied to the overdue amount. This penalty is linear, meaning it compounds day by day on the unpaid installment.
For example, if your installment is $100 and you miss the due date, you would owe $110 after one day, $120 after two days, $130 after three days, and so on.
This penalty structure is designed to encourage timely payment. As stated in the Whitepaper: "This ensures the contract remains payment-driven and prevents prolonged delinquency."
What Triggers Termination
Termination occurs only when one specific condition is met: the value of overdue installments plus accumulated penalties reaches the equivalent of two full installments.
Based on the 10% daily penalty rate, this threshold is typically reached after approximately 10 consecutive days of non-payment. Until that point, your contract remains active, and you can still make the overdue payment (including accrued penalties) to bring your contract back to good standing.
Market price does not affect termination. Whether your asset's value goes up, down, or stays flat, your contract can only terminate due to missed payments. This is a core principle of the BitLease model.
What Happens During Termination
If the termination threshold is reached, the following process is executed.
Step 1: The locked asset is liquidated through the Execution Spread engine.
Step 2: Outstanding debt and accumulated penalties are deducted from the liquidation proceeds.
Step 3: If the asset's value exceeds the total debt and penalties, the remaining surplus stays in your LTO Wallet as Free assets, fully owned by you.
Step 4: Formal on-chain ownership does not transfer since the contract was not completed through Full Settlement.
Step 5: The contract closes permanently.
Impact on Your Account
Internal Credit Score — Termination affects your BitLease Internal Credit Score. This score is used internally by the platform for future LTO eligibility, exposure limits, and contract terms. It is not connected to any external credit bureaus.
Future LTO Access — A terminated contract may affect the terms available to you on future LTO deals, including minimum down payment requirements and exposure limits, as determined by HyperHedge.
Your surplus is protected. If your asset was worth more than your outstanding debt, that difference belongs to you. It remains in your LTO Wallet as Free assets that you can transfer to your Funding Wallet and withdraw.
How to Avoid Termination
Monitor your Owning page regularly. The dashboard shows your Next Due date and amount for every active contract. Each contract card also displays Remaining Installments and Due Date.
Keep your LTO Wallet funded. Make sure your LTO Wallet has sufficient stablecoin balance before each installment due date. Installments are paid exclusively from the LTO Wallet. The system does not automatically deduct from your Funding Wallet.
Transfer funds proactively. If your LTO Wallet balance is running low, transfer USDT or other stablecoins from your Funding Wallet before the due date.
Consider settling or using Buyout. If you anticipate difficulty making future payments, you can settle early (see: How to Settle Your LTO Contract Early) or use the Buyout feature (see: Understanding Buyout and Economic Value Settlement) to close the contract on your own terms.
Need Help?
If you encounter issues , contact BitLease Support:
Email: support@bitlease.com
Subject: "Miss Payment"
Include: A description of the problem, any error messages, and steps you’ve already tried.
Response Time: Within 24 hours.
For urgent security concerns, email: security@bitlease.com.