# Loan recall and liquidation

## Recall

Recall is the process of replacing an original lender with a refinancing lender, or ending the loan and seizing the collateral. A lender is able to send a borrower's loan to Recall after it has been active for 24 hours. **A borrower can always repay their loan while in recall for no penalty.** 

If a lender wants to exit their position, the lender initiates a recall using an on-chain transaction through the Astaria application. Requesting a recall opens a new intent with an inclining rate auction. This auction functions the same as a traditional intent from a borrower; the only difference is that a loan's borrowing rate begins at 0% APY, and increases incrementally up to 1000% APY over 24 hours. 

<figure><img src="https://196550952-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FPdc645JXZaWGtkc4GInF%2Fuploads%2FKQtA7VGIeKCwtdzzdE8k%2FScreenshot%202024-03-13%20at%204.53.30%E2%80%AFPM.png?alt=media&#x26;token=f203feaa-fc11-48fc-906d-60c9f6694d16" alt="" width="375"><figcaption><p>A loan that is underwater and currently in recall.</p></figcaption></figure>

## Liquidation

If no lender refinances during this period, or the borrower has not repaid the loan, the loan is presumed defaulted. This is referred to as a **failed recall**. The collateral is now retrievable by the original lender through an on-chain transaction.&#x20;