> For the complete documentation index, see [llms.txt](https://docs.bsc.lista.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bsc.lista.org/for-developer/credit-loans/loan-lifecycle.md).

# Loan Lifecycle

| Phase                    | Timing                       | Description                                                                                                                                                                                    |
| ------------------------ | ---------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| 1. Credit assessment     | Daily (off-chain)            | Lista scores eligible Binance MPC wallets, assigns credit limits, and publishes a new Merkle root to `CreditBroker`.                                                                           |
| 2. CreditToken mint/burn | After root update            | User submits Merkle proof to claim or adjust `CreditToken` balance. Mint for increased score, burn for reduced score.                                                                          |
| 3. Supply and borrow     | T = 0                        | Borrower calls `CreditBroker.supplyAndBorrow(amount, proof)`. Proof is validated, broker calls `Moolah.borrow()` on behalf of user, upfront interest is deducted, and net amount is disbursed. |
| 4. Repayment             | On or before maturity        | Borrower calls `repay()`. Principal returns to vault.                                                                                                                                          |
| 5. Grace period          | Maturity to maturity + grace | Loan is overdue but penalty is not yet applied. Borrower can still repay principal plus origination fee.                                                                                       |
| 6. Penalty applied       | After grace period           | A `3%` penalty is applied to outstanding debt and routed to Credit Vault.                                                                                                                      |
| 7. Blacklist             | After penalty trigger        | Merkle-gated operations (supply/withdraw/borrow) are suspended until full repayment including penalty.                                                                                         |
| 8. Reinstatement         | After full repayment         | Blacklist is removed. Credit score may be restored gradually, based on policy.                                                                                                                 |

## Notes

* Interest is typically collected upfront in the broker flow.
* `CreditBrokerInterestRelayer` routes interest to Credit Vault.
* Merkle proof checks are central to both credit-limit updates and borrow authorization.


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