Check a DeFi loan's safety from collateral, debt and liquidation threshold: LTV, health factor, the liquidation trigger level and top-up needed.
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A simplified model: it ignores accrued interest, borrowing and liquidation fees, oracle slippage and the specific liquidation bonus of a protocol. Not financial advice.
A collateralized loan is only as safe as the distance between your position and the point where the protocol can seize your collateral. This tool compresses that safety into three numbers: your LTV, your health factor, and the exact collateral level at which liquidation would trigger.
The health factor (HF) measures how safe a loan is, in the Aave style. It is the liquidation threshold divided by your LTV: HF = threshold ÷ LTV. A higher number means a wider safety margin. An HF above 1.5 is comfortable, between 1.2 and 1.5 you are getting close to liquidation, and below 1.2 you are in the danger zone.
Liquidation triggers when your collateral value falls to debt ÷ threshold. For example, with $6,000 of debt and an 80% threshold, the position is liquidated when the collateral value drops to $7,500. That is the exact level the price has to reach before a liquidator can act.
LTV stands for loan-to-value and is simply your debt divided by your collateral value, expressed as a percentage. An LTV of 60% means you have borrowed 60% of what your collateral is worth. A lower LTV means more buffer before liquidation.
SAFE (green) is shown when your health factor is above 1.5, NEAR LIQUIDATION (yellow) when it is between 1.2 and 1.5, and DANGER (red) when it is below 1.2. The tiers are a quick read on how much the price can fall before you get liquidated.
It is a simplified, protocol-agnostic model. It ignores accrued interest, borrowing and liquidation fees, oracle slippage, and the specific liquidation bonus of a given protocol, so treat it as an estimate. Real risk can be higher than the numbers suggest. Nothing here is financial advice.
If you just finished with DeFi Loan Health Calculator, the natural next steps are Impermanent Loss Calculator, Loan Prepayment Calculator, Staking APR Calculator, or browse every tool in Crypto Tools.