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.