> ## Documentation Index
> Fetch the complete documentation index at: https://docs.jup.ag/llms.txt
> Use this file to discover all available pages before exploring further.

# Loans

> Borrow USDC using JLP as collateral while maintaining JLP yield exposure.

This page covers JLP Loans: how to borrow USDC against your JLP, the LTV thresholds, how the borrow rate works, and how liquidation is handled.

## What is JLP Loans?

JLP Loans allows users to deposit JLP tokens as collateral to borrow USDC. The position continues to earn JLP yield while the loan is active, allowing users to access liquidity without exiting their JLP position.

The protocol uses an overcollateralized lending model with dynamic interest rates based on utilization.

***

## Key Parameters

| Parameter        | Value                       |
| ---------------- | --------------------------- |
| Collateral       | JLP                         |
| Borrowable asset | USDC                        |
| Maximum LTV      | 90%                         |
| Liquidation LTV  | 95%                         |
| Liquidation fee  | 2% of liquidated collateral |

***

## Loan-to-Value (LTV)

The **Loan-to-Value (LTV)** ratio represents the ratio between your outstanding debt and the USD value of your JLP collateral.

```math theme={null}
LTV = Outstanding Debt (USD) / JLP Collateral Value (USD)
```

### LTV Thresholds

| Threshold       | Value | Meaning                                                    |
| --------------- | ----- | ---------------------------------------------------------- |
| Maximum LTV     | 90%   | Maximum you can borrow against deposited collateral        |
| Liquidation LTV | 95%   | LTV at which the position becomes eligible for liquidation |

### Example

With \$10,000 worth of JLP deposited:

| Action                  | Amount       | LTV |
| ----------------------- | ------------ | --- |
| Maximum initial borrow  | \$9,000      | 90% |
| Liquidation threshold   | \$9,500 debt | 95% |
| Recommended safe borrow | \$6,500      | 65% |

***

## Position Management

Each user holds a single lending position, which displays:

* **My Collateral** — JLP deposited as collateral
* **My Debt** — outstanding debt (principal + accrued interest) in USDC
* **Liq. Price (JLP)** — the estimated JLP price at which the position will be liquidated
* **LTV** — current loan-to-value ratio

***

## Borrow Rate

The borrow APR is dynamic and adjusts based on pool utilization. Higher utilization means a higher borrow rate.

### Utilization Formula

```math theme={null}
Utilization = (Locked for Trading + Total Borrowed) / Total Pool Size
```

<Expandable title="Rate Calculation (code)">
  ```
  // When utilization ≤ 80% (linear curve)
  Rate Increase = (Target Rate - Min Rate) × Utilization / Target Utilization
  Yearly Rate   = (Min Rate + Rate Increase) × 10^9 / 10,000

  // When utilization > 80% (jump rate curve)
  Rate Diff         = Max Rate - Target Rate
  Util Above Target = Utilization - Target Utilization
  Remaining Cap     = 10^9 - Target Utilization
  Extra Rate        = (Rate Diff × Util Above Target) / Remaining Cap
  Yearly Rate       = (Target Rate + Extra Rate) × 10^9 / 10,000

  // Convert to hourly and APR
  Hourly Rate = Yearly Rate / (24 × 365)
  Borrow APR  = (Hourly Rate / 10^9) × 24 × 365 × 100
  ```

  The specific rate parameters (`jumpRateState`, `borrowsFundingRateState`) are defined per custody account.
</Expandable>

***

## Liquidation

Liquidation is triggered when a position's LTV exceeds the **Liquidation LTV of 95%**. Only whitelisted keepers can execute liquidations.

### Partial Liquidation

When a position exceeds the liquidation threshold but is not critically under-collateralized, the protocol performs a partial liquidation:

* Repays a portion of the outstanding debt
* Burns only the required amount of JLP collateral
* Brings the position back toward a safer LTV range
* Allows the user to retain the remaining collateral and position

Partial liquidation is only triggered when the position size exceeds a minimum liquidation size, to avoid dust liquidations.

### Full Liquidation

A full liquidation is triggered when:

* The position's LTV significantly exceeds the liquidation threshold (approximately 97%+)
* Market volatility is extreme
* Partial liquidation alone would be insufficient to restore solvency

Full liquidation repays the entire outstanding debt, burns the necessary JLP collateral, and returns any remaining collateral to the user after fees.

### Liquidation Fee

A **2% fee** is applied to the liquidated collateral. This fee is deducted from the collateral burned and deposited into the JLP pool as protocol revenue.

<Warning>
  If your position is fully liquidated, you may lose a significant portion of your deposited JLP collateral. Monitor your LTV regularly, especially during periods of JLP price volatility.

  You can avoid liquidation at any time by depositing additional JLP collateral or repaying part or all of your outstanding debt.
</Warning>