Extending a loan

If you reach maturity without the cash to repay, you are no longer choosing between finding it and losing the card. You can extend: pay the interest you owe, pay down part of the principal, and start a fresh term on a smaller loan against the same card.

An extension is not a pause and it is not a deferral. Nothing is added to what you owe and nothing is carried forward. Each extension is a smaller loan than the one before it.

Extensions per loan

Then the loan must be repaid or it goes to sale.

Minimum principal paydown

10%

Per extension, rounded up. You may pay down more.

Wait before re-borrowing

48 hours

After a loan closes, on that physical card.

What you pay at an extension

One transfer, made up of three things:

All the interest you currently owe. Not part of it — the whole outstanding charge is settled. This is the rule the others exist to protect: rolling unpaid interest into principal is what turns a short loan into a debt trap, and MLKY will not do it.
At least 10% of your principal. Your loan gets smaller every time. The 10% is a floor, not a fixed amount; pay down more if you can.
A fresh origination fee on the renewed term, the same percentage of interest the protocol charged when you first drew.

At draw the origination fee is withheld from the money you receive. An extension pays you nothing, so the same fee arrives as cash in the payment above. Same fee, same size, just nothing to net it against.

A worked example

Take the loan MLKY's design documents use as their representative case: a card the oracle appraises at $1,000, borrowed against at 50% LTV for a $500 principal on a 7-day term.

The term option here carries a 19,000 bps rate (190% APR) — the rate that produces the $18.21 of interest that representative loan is costed at everywhere else, so the numbers below line up with the ones used to reason about defaults. The origination fee is 200 bps, 2% of the interest, which is the production default. Interest is principal × rate_bps × term_secs / (10,000 × 31,557,600) and the fee is interest × 200 / 10,000. Both truncate at micro-USDC, and the figures below are what the program computes rather than rounded illustrations — your own pool's rate will differ, but the shape will not.

So the loan you drew owes $18.206707 of fixed interest at maturity, for a payoff of $518.206707.

Extension one

Line	Amount
Interest owed, paid in full	$18.206707
Principal paydown (the 10% minimum)	$50.000000
Origination fee on the new term	$0.327720
You transfer	$68.534427

Afterwards your principal is $450.00, your new fixed interest is $16.386036, and your maturity is 7 days from the moment the extension lands — not 7 days from the old maturity.

All three, end to end

	Interest paid	Paydown	New fee	You transfer	Principal after
Extension 1	$18.206707	$50.000000	$0.327720	$68.534427	$450.00
Extension 2	$16.386036	$45.000000	$0.294948	$61.680984	$405.00
Extension 3	$14.747433	$40.500000	$0.265453	$55.512886	$364.50

After the third extension you owe $364.50 of principal and $13.272689 of interest — a payoff of $377.772689, due 7 days later.

Across the three you will have transferred $185.728297, of which $135.50 was your own principal coming back down and $49.340176 was interest. The fees over all three extensions came to $0.888121. Your principal fell 27.1% from where it started.

Your card is appraised again, and the extension can be refused

This is the part most worth understanding before you rely on extending.

A normal MLKY loan is priced once. The oracle quotes your card when you create the loan, and after that the appraisal on the loan is a historical record. For a 7-day loan that is fine. For a loan that can run 7, 14, 21 or 28 days through renewal it is not — graded cards are a market that moves, and three extensions would otherwise turn a single appraisal into a month of exposure.

So an extension is the one point in a loan's life where the protocol takes a second look at the collateral, and it applies exactly the ceilings a new loan would face. If your card has fallen far enough that even the reduced principal no longer fits under the loan-to-value ceiling, the extension is refused and you are back to repaying or letting the sale run.

On the worked example above, at 50% LTV, that threshold is concrete:

Extending to	Refused unless your card is now worth at least
$450.00 (extension 1)	$900
$405.00 (extension 2)	$810
$364.50 (extension 3)	$729

A card that was appraised at $1,000 at draw therefore has to hold above $900 to be extended the first time. The paydown helps you here — each extension needs less support than the last — but a card that has dropped sharply cannot be extended, and the app will tell you that in those words rather than as an error code.

When you can extend

Any time the loan is active, including after maturity and inside the grace period. The borrower this feature exists for is standing at day 7 without the cash, so gating it on "before maturity" would exclude exactly them.
Not once the loan has defaulted. From there your route back to the card is redemption, which pays the full payoff and does not renew. See default and liquidation.
Not while the protocol or the pool is paused. An extension keeps money lent out and re-underwrites a card, so it takes the same pause gates as a new loan. Repaying is never blocked by a pause — that path has to stay open in every circumstance, and it does.
Not a fourth time. The fourth attempt is refused by name rather than quietly repriced. You will be warned as you approach your last permitted extension.

Only you can extend your own loan. loan_extend is bound to the loan's borrower, so no lender, admin or third party can renew it on your behalf, and nobody can renew it against your wishes. There is no counterparty who gains a right over you by your extending — the decision, and the payment, are yours.

After your loan closes: 48 hours

Once a loan is closed out, 48 hours must pass before a new loan can be opened against the same physical card. The clock runs from the close, not from the repayment, and it is keyed to the card's grading certificate rather than to the NFT — so re-minting the card does not reset it.

The reason is the same one behind the three-extension cap. Without a wait, "repay and immediately borrow again" would reproduce an unlimited rollover through the front door and the cap would count nothing.

Two practical consequences:

It applies to every pool. The wait is a property of the card, not of the pool you borrowed from, so you cannot shorten it by moving to another pool.
It does not apply after a sale. A card that was liquidated has left you entirely, and a loan that was cancelled before it ever drew has nothing to wait out.

Once the 48 hours have elapsed, one small account on-chain still has to be closed before the card is borrowable again, and closing it refunds the rent it has been holding — rent you paid when you opened the loan. That is card_cooldown_release, a single transaction.

Send it yourself. The instruction is permissionless and it pays that rent to whoever calls it, so if you leave it, anyone may close it for you and collect the rent instead of you.

What an extension does not change

Your card does not move. It stays exactly where it is, locked under the protocol's authority. An extension touches no collateral account at all.
Your loan is not closed and reopened. It is the same loan, repriced. Its history, its identifier and its original draw date all survive.
It is not a repayment. Your loan stays active and your card stays collateral. If you want the card back, that is repaying, not extending.
Your interest rate is not renegotiated downward as a favour. You pick a term option from the pool exactly as you did at the start, and the rate is that option's rate.