> For the complete documentation index, see [llms.txt](https://docs.libre.org/libre-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.libre.org/libre-docs/core-features/overview.md).

# Borrowing

Borrow USDT against Bitcoin held in your own vault address, at a rate that moves with demand, with no fixed term and no repayment schedule.

Lock Bitcoin, borrow USDT against it, repay when you like, get the same Bitcoin back.

Your collateral goes to an address that belongs to your loan alone. It isn't pooled with other borrowers, isn't lent out, and can be looked up on the Bitcoin blockchain at any time.

[Borrow USDT →](https://defi.libre.org/borrow)

## How it works

### 1. Open a vault

Connect a wallet at [defi.libre.org/borrow](https://defi.libre.org/borrow). Libre creates a vault for you and generates a Bitcoin deposit address that belongs to it.

### 2. Send Bitcoin to that address

Once the deposit confirms on Bitcoin, it is credited to your vault as collateral. There is no fee to bring Bitcoin in.

### 3. Borrow USDT

You can borrow up to **60% of your collateral's value**. Borrowing less leaves more room before you need to pay attention — see the table below.

There is also a **minimum loan size of 0.001 BTC worth of USDT** — around $80 at a $80,000 Bitcoin price. Because the floor is denominated in Bitcoin, the dollar minimum moves with the price.

When you borrow you also set the **highest interest rate you're willing to pay** — a cap, in the same spirit as slippage tolerance on a trade. A rate spike can never quietly hand you a more expensive loan than you agreed to.

Two details worth knowing about that cap:

* It is checked against the rate **after your loan is disbursed**, not the rate on screen when you ask. Borrowing raises the pool's utilization, and utilization is what sets the rate — so your own loan nudges the rate up before the check happens. Setting your cap to exactly today's displayed rate means it will never fill. Give it room, or pass the curve's maximum (2000 bps) to accept whatever the pool charges.
* If the rate would exceed your cap, the request is **not rejected — it stays in the queue** and opens automatically if the rate later falls back under it.

The same is true when the pool is short of USDT: your request queues and fills when liquidity returns. Either way nothing fails loudly, so if a borrow seems not to have happened, check the queue. You can cancel a queued request at any time before it fills.

### 4. Repay whenever you want

There is no fixed term, no monthly payment and no deadline. Interest accrues while the loan is open, and you can repay part or all of it at any time. Once repaid you withdraw your Bitcoin to any address you choose.

Withdrawing collateral crosses the vault bridge back to Bitcoin, which charges **0.5% (50 bps), capped at 0.005 BTC**, with a minimum withdrawal of **0.0008 BTC**. Bringing Bitcoin *in* is free — the fee applies only on the way out.

The rate is not fixed for the life of the loan — it moves with how much of the pool is lent out, from around 3% when the pool is idle to 20% when it is fully drawn. See [lending](/libre-docs/core-features/overview-1.md) for the curve.

## The one thing to watch

Loan health is measured as **loan-to-value**: what you owe divided by what your Bitcoin is currently worth. Borrow $60,000 against $100,000 of Bitcoin and you're at 60%. If Bitcoin falls, that number rises on its own — you don't have to do anything wrong to drift upward.

| LTV       | Status                    | What to do                          |
| --------- | ------------------------- | ----------------------------------- |
| Up to 60% | Where every loan starts   | Nothing                             |
| 60–70%    | Drifting                  | Keep an eye on it                   |
| 70–80%    | Warning                   | Add collateral or repay some        |
| Above 80% | **72-hour timer running** | Get below **70%** before it expires |

If the timer runs out and you are still at or above 70%, enough of your collateral is sold to clear the debt plus a **5% liquidation fee**, at a 1% discount to the oracle price. Only what's needed is sold — the rest of your Bitcoin stays in your vault.

{% hint style="warning" %}
**Getting back under 80% does not stop the timer.** Once it starts, only getting below **70%** clears it. That gap is deliberate — it stops a loan from bouncing in and out of liquidation on small price moves.
{% endhint %}

You can act at any point: send more Bitcoin to your vault address, or repay part of the loan. Either lowers your LTV.

→ [Liquidation in detail](/libre-docs/understanding-the-platform/mechanics/liquidation.md)

## Where the price comes from

Your LTV depends on the price of Bitcoin, so it matters where that number comes from. Libre uses an **on-chain oracle**: several independent feeders publish a price, the contract averages the reports of a round — at least three feeders, agreeing within 10% of each other, or the round is skipped and the previous price stands — and any price older than five minutes is refused outright.

That last part protects you. If the feeds stop updating, liquidations **pause** rather than run on a stale number.

→ [The price oracle](/libre-docs/understanding-the-platform/mechanics/price-oracle.md)

## Why your Bitcoin sits in its own vault

Most lending platforms pool collateral. Yours goes in with everyone else's, and you hold a claim rather than coins.

On Libre your vault address holds your Bitcoin for the life of the loan. It is never lent to anyone, never rehypothecated, and never mixed. You can check the balance yourself on any Bitcoin block explorer.

→ [Custody & security](/libre-docs/core-features/overview-3.md)

## Questions

**What happens to leftover value if I'm liquidated?**\
Only as much Bitcoin as is needed gets sold — enough to cover the outstanding debt plus a 5% liquidation fee, priced 1% below the oracle. The remaining Bitcoin stays in your vault and you can withdraw it. You are left holding BTC, not cash.

**What does liquidation actually cost me?**\
A 5% fee on the outstanding debt, plus the 1% sale discount.

If you don't hold enough staked LIBRE voting power, a further \~1.2% of collateral is sold as an execution buffer — but that is **not** an extra fee. It sizes the sale so it definitely covers the debt, and whatever isn't needed comes back to you as USDT. The real cost of it is only that slightly more of your Bitcoin was converted than strictly had to be.

**Can I add collateral later?**\
Yes. Send more Bitcoin to the same vault address at any time; it lowers your LTV as soon as it confirms.

**Do I get the exact same bitcoins back?**\
You withdraw from your own vault, so you are not drawing on a shared pool to be repaid.

**Is there a penalty for repaying early?**\
No. There is no term, so there is nothing to repay early. You pay interest only for the time the loan was open.