# Borrowing

## ​What is Borrow?

One of NAVI’s key features is to allow users to collateralize capital and borrow assets so that they can utilize them in the broad Sui DeFi ecosystem.&#x20;

This means you can supply an asset as collateral and borrow out another type of asset (check out the [Supply & Earn](https://naviprotocol.gitbook.io/navi-protocol-docs/getting-started/supply-and-earn) section for more info). Please see the below steps for the details:&#x20;



## Borrowing

Before borrowing, you need to make sure you have deposited assets as collateral. The maximum amount that users are eligible to borrow depends on the value of deposits, asset type, and the assets' available liquidity.

* Once you have deposited assets as collateral, click on “Borrow” in the right panel to access the borrowing interface.&#x20;
* Scroll down to the asset you wish to borrow and select the amount
* Confirm your transaction in your wallet and finalize the borrow procedure.&#x20;

<figure><img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcad7CKryYmTUXIfLh4ECpugz2wfguJ7xFbF7DvwPX9G6rKuR-VwJtl9Juf-R4mx94fZ7seTBufH4Efg2KMwdi_FlRYjuS6uN3bejn3EHeRnQewetJvepqN2fFabRqqIzUtmJmmbA?key=33GO0JS-NU-2-0txD4NVe7Fn" alt=""><figcaption></figcaption></figure>

## Max Borrow

The assets supplied by the user will affect the maximum loan value. The loan amount is limited based on the health factor. When the max button is clicked, the minimum health factor that the user can achieve will be calculated, formula is:

$$H_f = \frac{ \sum Supply_i \: in \: USD \: \times \: Liquidation Threshold_i}{\sum Supply_i \: in \: USD \: \times \: \: MAX LTV_i}$$



## How do I repay my loan?

You repay the loan in the original format of the asset one borrowed. For example, if you borrow 1 Sui initially, you need to pay back 1 Sui + interest accrued(in Sui). You can only repay with your wallet balance, not collateral.

<figure><img src="https://757519164-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYTRq6w3DGapKHxfqaA3Z%2Fuploads%2FqykMA4Q2AGyceOX5boFw%2F%E5%B1%8F%E5%B9%95%E5%BF%AB%E7%85%A7%202025-03-31%20%E7%9A%84%2015.03.23%20%E4%B8%8B%E5%8D%88.png?alt=media&#x26;token=eb92410a-ce31-4fd8-bb59-7697f6264a7f" alt=""><figcaption></figcaption></figure>

* If you have debts, the debt amount and "**Repay**" button will appear at the top of the operation area. Click the **Repay** button to the next step.
* Enter the amount to repay, the tokens will be deducted from your wallet balance.
* Click on the “**Confirm**” button and approve the transaction in Sui compatible wallet&#x20;
* Once the transaction succeeded, the loan is repaid at the input amount.

## Reward Limit in Borrow

If you borrow the same token as you supplied, this will significantly reduce the rewards you can receive.

$$
Effective Amount = Supply Amount - Borrow Amount
$$

In case the user has practiced borrow nesting to extremes, the effective amount will reduce to 0. Effective Amount: the effective liquidity counting towards users’ rewards.
