# Being a Borrower
**There are two routes to become a borrower - create a Liquidity Request or find one of the Liquidity Deposits and 'Borrow' it.**
**Way 1.** Taking a loan from the **Markets** page, all you have to do is to find the most attractive or the liquidity thats needed for you. After pressing 'Borrow', follow the steps and sign the transaction. Shortly after signing, Liquidity will come to your wallet.
**Way 2.** Create a Liquidity Request.
**A smart tip:** When submitting a **Liquidity Requests**, offering higher APY will increase the chances of finding a **Lender**.
After confirming your **Liquidity request**, your **Collateral** will be deposited into a smart contract. Once on-chain, your loan request will be visible on the **Market** and **Dashboard** pages.
For **Liquidity Requests** that wasn't funded by Lender and the Health factor falls below 1.0, it will be removed from the market page. In turn, it will show up in the **Dashboard** with the **Withdraw** option.
When you find a **Lender**, you will receive a “B” token called an **NFT Bond**. Remember to keep this token to repay the loan.
### **Canceling a loan request**
Users can cancel non-funded liquidity requests on the **Dashboard** page by clicking the **Cancel** button on the desired request. \
After canceling the request, it is removed from the **Markets** page. The collateral is withdrawn from the smart contract and returned to the user's wallet.
**FAQ:**
1. **When can I cancel my request?**\
You can cancel a request anytime before it gets supplied by a lender.
2. **How much does canceling a liquidity request cost?**\
Canceling a request triggers a standard network transaction that charges fees of around 1 ADA.
3. **How do I cancel my request?**\
Canceling a request requires the borrower to provide the underlying B NFT bond, which is mandatory to execute the transaction.
4. **Can someone else cancel my request?**\
The loan can be canceled by whoever holds the borrower’s NFT. The same person is also eligible to claim the collateral.
### **How to claim collateral from a liquidated loan**
When the **Health factor** reaches the liquidation threshold, the user can claim a portion of the liquidated collateral. The claimable amount depends on the **Health factor** during the loan liquidation.
You can claim the leftover collateral by navigating to the **Dashboard** → **Liquidated loans** page. Clicking on the button will initiate a transaction requiring you to pay standard transaction fees and provide the **NFT bond**.
### **Repaying the loan**
The borrower has to return the loan plus interest before the deadline. To repay your debt, click the **Repay** button on the **Dashboard** window, which will trigger a transaction in your wallet. Keep in mind that you must provide the loan, the interest, and the NFT bond.
**Disclaimer:** Returning a loan earlier than its term will decrease the interest payment but the minimum paid interest fee will be at least 20% of the fee that was initially set by the lender.
**Example:** If the loan term is 5 days, and the interest is 5 ADA, returning the loan after 3 days will reduce the interest to 3 ADA, but if you're repaying instantly after receiving a loan you will pay 20% of the total interest which would be 1 ADA.
**Minimum interest fee** of 20% was implemented after community [DAO proposal](https://governance.aada.finance/t/proposal-implement-minimum-interest-fee-threshold-to-the-aada-finance-dapp/387/5) has been approved.
### **Risks associated with borrowing**
As a borrower, you will be exposed to two types of liquidation risk:
* **Oracle liquidation** - When the **Health Factor** reaches the **Liquidation Threshold** or decreases further, the **Lender** can choose to liquidate a loan and claim the **Collateral**.
* **Standard liquidation** - When the **Borrower** fails to meet the loan deadline, the **Lender** can claim the entire **Collateral**.
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