# Borrow & Repay

### How Borrowing Works <a href="#how-borrowing-works" id="how-borrowing-works"></a>

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AlphaFi Lend uses an over-collateralized lending model:

1. Supply assets to establish collateral
2. Borrow up to your Safe Borrow Limit
3. Interest accrues on your debt continuously
4. Repay your loan plus interest to free up collateral

Your borrowing capacity depends on the value of your collateral and the LTV (Loan-to-Value) of each asset.

### Understanding Your Limits <a href="#understanding-your-limits" id="understanding-your-limits"></a>

<div data-with-frame="true"><figure><img src="/files/Akd5abeeRRSEcfWxuoGL" alt=""><figcaption></figcaption></figure></div>

The dashboard displays a health bar showing your position status:

<table><thead><tr><th width="329.875">Metric</th><th>Description</th></tr></thead><tbody><tr><td>Borrow Limit Used</td><td>Current value of your borrows</td></tr><tr><td>Safe Borrow Limit</td><td>Maximum you can borrow based on LTV</td></tr><tr><td>Liquidation Threshold</td><td>Point at which liquidation becomes possible</td></tr></tbody></table>

The health bar visualizes these thresholds:

* **Green zone** — Safe, healthy position
* **Safe marker** — Your LTV limit (typically 80-85%)
* **Liq marker** — Liquidation threshold (typically 85-90%)

<details>

<summary>Example: Understanding the health bar</summary>

If you supply $100 of collateral with 85% LTV and 90% liquidation threshold:

* Safe Borrow Limit = $85
* Liquidation begins if debt reaches $90

If you borrow $40, your health bar shows roughly 47% utilized ($40 / $85). You're well within the safe zone.

</details>

### Borrow APR <a href="#borrow-apr" id="borrow-apr"></a>

<div data-with-frame="true"><figure><img src="/files/KUKQgjnHZumTkEHNUq4m" alt=""><figcaption></figcaption></figure></div>

The Borrow APR is the annual interest rate you pay on borrowed assets. Borrow rates are usually higher than supply rates. This difference helps fund supplier rewards and protocol reserves.

Borrow rates increase as utilization rises. When an asset is heavily borrowed, rates spike to incentivize repayment and attract more suppliers.

<div data-with-frame="true"><figure><img src="/files/ogTMDowVQCJfaNtuO4Kn" alt=""><figcaption></figcaption></figure></div>

### Health Factor <a href="#health-factor" id="health-factor"></a>

Your health factor indicates how close your position is to liquidation. It's displayed as the percentage of your borrow limit utilized.

<div data-with-frame="true"><figure><img src="/files/RWiufvMNJdRCopLUdk8x" alt=""><figcaption></figcaption></figure></div>

**Keeping your position healthy:**

* Stay in the green zone (well below the Safe marker)
* Monitor your health if collateral prices drop
* Repay debt or add collateral if approaching the Liq marker
* Account for interest accrual increasing your debt over time

<details>

<summary>What happens if price moves against me?</summary>

If your collateral value drops or your borrowed asset increases in value, your health factor worsens. For example:

* You borrow $50 against $100 of SUI
* SUI price drops 20%, collateral now worth $80
* Your Safe Borrow Limit drops to $68 (85% of $80)
* Health bar now shows \~74% utilized ($50 / $68)

Continue monitoring and consider repaying or adding collateral.

</details>

### The Borrow Flow <a href="#the-borrow-flow" id="the-borrow-flow"></a>

1. Ensure you have supplied collateral
2. Navigate to the asset you want to borrow
3. Click "Borrow"
4. Enter the amount
5. Confirm the transaction

Your borrows appear in the "Your Borrows" panel, showing:

* Asset and debt amount
* Current APR
* Options to Borrow more or Repay

### The Repay Flow <a href="#the-repay-flow" id="the-repay-flow"></a>

Repay your borrows at any time to:

* Reduce interest payments
* Free up collateral for withdrawal
* Improve your health factor

To repay:

1. Navigate to your borrowed asset
2. Click "Repay"
3. Enter the amount
4. Confirm the transaction


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