# Borrowing

**How to borrow liquidity on Levvy using your assets 101.**

Levvy offers borrowers the opportunity to access liquidity promptly through a competitive lending system, enabling them to optimize their **loan-to-value** ratio **(LTV)**.

With this system, lenders compete with each other to provide the highest LTV, ensuring borrowers can maximize their borrowing potential.

Once you accept a loan offer, your tokens will be locked to your stake key in the Levvy smart contract as collateral. This means transferring ownership of the assets to a smart contract that holds it securely until the loan is repaid.

After locking your assets, the agreed-upon loan amount is disbursed to you instantly.

If you fail to repay the loan within the agreed-upon terms, the lender is able to foreclose the tokens used as collateral, and the assets will be transferred to their wallet. At that point, you will not have the ability to access those assets.

You do have the option to extend a loan on new terms in case you aren't able to pay the loan in time. This feature is now open to everyone!<br>

#### -> ❓ How does the protocol choose the best interest rate for the borrower? <a href="#greater-than-how-does-the-protocol-choose-the-best-interest-rate-for-the-borrower" id="greater-than-how-does-the-protocol-choose-the-best-interest-rate-for-the-borrower"></a>

Our team conducts a thorough analysis of loan metrics to carefully balance the supply and demand between lending and borrowing. This enables us to determine the most suitable interest rate for each collection, ensuring an optimal lending experience.

1. Open the website <https://levvy.fi/> and connect the wallet of your preference;
2. Choose NFT's or Tokens;
3. Click on "Borrow";
4. Choose the NFT or Token from which you have the assets to use as collateral;
5. Follow the steps, sign the transaction, and you're done!

When borrowing, enter the amount of tokens or the NFT that you would like to borrow against. The module will let you know the average LTV based on your total tokens or NFT.

*This amount changes, because you may be borrowing from multiple lenders at once, who each have different rates. The module will also let you know the fees and interest that you will need to repay on the loan.*
