# Loan collateral For safety reasons, the total amount that can be borrowed has to be less than the value of the collateral, in case of negative fluctuations in the collateral value and to guarantee the interest payment. The **collateral factor** $$CF$$ represents how much a user can borrow against the collateral supplied to the protocol, in percent terms. For example, a more stable asset such as USDC may have $$CF=80%$$% (for $10 supplied, up to $8 of value can be borrowed against it) whereas ALGO may have $$CF=60%$$%. Consider a user who deposits multiple assets and uses them as collateral for a loan. The borrowable amount $$BA\_t$$ at time $$t$$ for a given loan’s collateral balance is: $$ BA\_t=\sum\_{i=ASSET}^{collateral}A\_{t\_i}*P\_i*CF\_i $$ Where: * $$A\_{t\_i}$$ denotes the current user collateral balance if they were to withdraw the Asset. * $$P\_i$$ is the price of the collateral asset​. * $$CF\_i$$ is the collateral factor. * the subscript $$i$$ represents each collateral of the loan. Since the collateral is composed of different assets, the maximum borrowable amount of each collateralized token must be computed and summed together. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.folks.finance/architecture/loan-collateral.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.