In most cases it's bound to your collateral so if you don't pay back or the value of the collateral dips below some level, the loan is automatically reclaimed f

In most cases it's bound to your collateral so if you don't pay back or the value of the collateral dips below some level, the loan is automatically reclaimed from your collateral. A lot of the loans are 1:2, 1:4, or greater depending on what the currency it is being traded in is. If your total collateral dips below that multiple of the loan, you forfeit the value of the loan from your collateral plus some penalty fee.