> For the complete documentation index, see [llms.txt](https://docs.lendbit.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.lendbit.finance/borrowing-on-lendbit/loan-to-value-ltv-ratios/health-factor.md).

# Health Factor

The **health factor** is an important metric that represents the safety level of your loan based on your collateral. It is calculated as the ratio of your collateral value to your borrowed amount.

* **Healthy Loan**: A high health factor indicates that your loan is safe and your collateral can cover the borrowed amount.
* **Risky Loan**: A low health factor suggests that your loan is at risk of liquidation, meaning your collateral could be sold to repay the loan if the health factor drops too low.