> ## Documentation Index
> Fetch the complete documentation index at: https://docs.edel.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Borrowing

> Step-by-step guide to borrowing against your crypto and tokenized stock assets on Edel Finance

<Frame>
  <img src="https://mintcdn.com/edelfinance/RAmQMxLSnNZx1q3j/images/Borrowing.jpg?fit=max&auto=format&n=RAmQMxLSnNZx1q3j&q=85&s=0a13f2db42235ff9747afe78748d490c" alt="Borrowing guide showing how to access cash without selling investments" width="1920" height="1080" data-path="images/Borrowing.jpg" />
</Frame>

Access cash without selling your investments. This guide walks you through exactly how to borrow on Edel Finance and manage your loan safely.

### The Simple Explanation

Think of it like a pawn shop, but better:

1. **You bring valuable assets** (your crypto or stocks worth \$10,000)
2. **The protocol lends you cash** (up to \$7,000 in stablecoins)
3. **You keep ownership** (still earn dividends, price gains, and lending yield)
4. **Pay back whenever** (no fixed schedule, just pay interest)
5. **Get your collateral back** (once you repay the loan + interest)

## Wealth Management Applications

<CardGroup cols={2}>
  <Card title="Tax Optimization" icon="receipt">
    Access capital without triggering capital gains on appreciated crypto or tokenized stocks
  </Card>

  <Card title="Diversification" icon="shuffle">
    Rotate crypto gains into high-quality tokenized stocks and RWAs without selling your core holdings
  </Card>

  <Card title="Taking Profits" icon="banknote">
    Lock in value by borrowing against volatile assets and deploying into safer, yield-bearing opportunities
  </Card>

  <Card title="DeFi Opportunities" icon="sparkles">
    Tap liquidity for stablecoin farming, hedging, or participating in new token launches, all without selling
  </Card>
</CardGroup>

### Real Borrowing Examples

<Tabs>
  <Tab title="Crypto Collateral">
    **Your Collateral:** 10 ETH (worth \$25,000)

    **Borrowing Details:**

    * Max borrow (80% LTV): \$20,000
    * Safe borrow (50% LTV): \$12,500
    * Interest rate: 5% APY

    **Monthly Costs:**

    * On USD12,500 borrowed: \~USD52/month interest
    * Your ETH still earns: \~USD58/month from lending
    * Net cost: Actually earning USD6/month

    <Check>
      Your collateral earning can offset borrowing costs.
    </Check>
  </Tab>

  <Tab title="Stock Collateral">
    **Your Collateral:** 100 TESLAon (worth \$50,000)

    **Borrowing Details:**

    * Max borrow (75% LTV): USD37,500
    * Safe borrow (50% LTV): USD25,000
    * Interest rate: 4.5% APY

    **Monthly Costs:**

    * On USD25,000 borrowed: \~USD94/month interest
    * Your Tesla earns: \~USD354/month from lending (8.5% APY)
    * Net income: Still earning USD60/month

    <Tip>
      Tokenized stocks often earn more from lending than borrowing costs.
    </Tip>
  </Tab>

  <Tab title="Mixed Portfolio">
    **Your Collateral:**

    * 5 ETH (\$12,500)
    * 50 APPLon (\$25,000)
    * 10,000 USDC (\$10,000)
    * Total: \$47,500

    **Safe Borrowing:**

    * Total borrow capacity: \~\$33,000
    * Actually borrow: \$20,000 (42% LTV)
    * Blended interest: 4.8% APY
    * Monthly interest: \~\$80

    <Note>
      Diversified collateral provides more stability during market swings.
    </Note>
  </Tab>
</Tabs>

## Common Questions Answered

<AccordionGroup>
  <Accordion title="How much can I actually borrow?">
    It depends on your collateral quality:

    * **Blue-chip stocks** (AAPL, TSLA): Up to 50% of value
    * **Major crypto** (ETH, BTC): Up to 90% of value
    * **Stablecoins**: Up to 90% of value
    * **Smaller tokens**: 40-60% of value
  </Accordion>

  <Accordion title="What happens if I can't repay?">
    There's no "due date" - your loan continues as long as your Health Factor stays above 1.0. If markets move against you and Health Factor drops below 1.0, the protocol automatically sells just enough collateral to bring you back to safety. You keep any remaining collateral.
  </Accordion>

  <Accordion title="How is interest calculated?">
    Interest compounds every second based on current market rates. For example:

    * Borrow \$10,000 at 5% APY
    * Daily interest: \~\$1.37
    * Monthly interest: \~\$41.67
    * Pay back anytime: \$10,000 + accumulated interest
  </Accordion>

  <Accordion title="Can I add or remove collateral?">
    Yes! You can:

    * **Add collateral**: Improve Health Factor anytime
    * **Remove excess**: Withdraw if Health Factor stays above 1.0
    * **Switch collateral**: Swap between assets without closing loan
    * **Top up**: Add more if approaching liquidation
  </Accordion>

  <Accordion title="What's the catch?">
    No catch, but understand the risks:

    * Market drops can trigger liquidation
    * Interest rates vary with demand
    * Gas fees for transactions (on Ethereum)
    * Smart contract risk (mitigated by audits)
  </Accordion>
</AccordionGroup>

## Next Steps

<CardGroup cols={2}>
  <Card title="Strategic Use Cases" icon="crown" href="/the-protocol/strategic-use-cases">
    Advanced strategies for maximizing borrowing benefits
  </Card>

  <Card title="Liquidation Protection" icon="shield" href="/concepts/liquidation">
    Deep dive into liquidation mechanics and protection strategies
  </Card>
</CardGroup>