When a lender or borrower wishes to reallocate assets for a non-defaulted loan, both the lender and borrower have the option to initiate the refinancing process for the loan.

Unlike debt transfer, there are some differences in the refinancing process.

For refinancing, it can be initiated at any time as long as the loan is not in default. However, for debt transfer, the lender needs to initiate the debt transfer process for a loan in order to transfer the debt. For refinancing, both loans with Fixed Loan Duration and Indefinite Loan Duration can be refinanced. However, for debt transfer, only Indefinite Loan Duration can initiate debt transfer. For refinancing, the operator involved are the lender or the borrower. However, for debt transfer, the operator involved are the new lender or the other.

Lender can initiate debt transfer for a non-defaulted loan at any time. Once a loan initiates debt transfer, the new lender has the option to decide whether to take over the loan. Third parties can also match the loan with a corresponding lending offer to update the loan's lender information. We refer to this process as 'Debt Transfer'.

In the peer to peer lending model, the protocol does not store assets. Users simply sign authorizations for token assets in their accounts, and these assets remain accessible in the user's account for them to use at any time.

In the pool to pool lending model, the assets supplied by lenders are stored within the lending pool smart contract on the blockchain. These assets are held securely within the decentralized protocol and are not controlled by any individual or centralized entity. The lending pool acts as a collective pool of assets contributed by lenders, which are then utilized to facilitate loans to borrowers.

In the lending model for Real World Assets, collateral for perpetual loans is liquidated after a certain period, known as the refinancing period, when initiated by the lender. Collateral for fixed-term loans, is liquidated upon the repayment deadline.

In the lending model for PFP NFTs, the collateral assets may be liquidated under certain circumstances to protect the lenders and the stability of the lending pool. The liquidation process occurs when the value of the collateral falls below a certain threshold (health level <100%) . If this ratio is breached, your collateral assets will be automatically liquidated to repay the outstanding loan and any accrued interest.