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

# Loans & Orders

Loans on Loopscale are bilateral contracts between a lender and borrower, matched via the protocol’s [Credit Order Book](/protocol-concepts/credit-order-book). Borrowers receive funds and escrow collateral, while lenders earn yield for the loan’s duration.

Each loan is defined by a set of configurable terms, including rate, payment schedule, duration, collateral requirements, and default conditions.

## Orders

* **Lend Order:** Defines how much capital a lender is offering, the requested rate, term, and accepted collateral.
* **Borrow Order:** Defines how much the borrower wants to borrow, what they’ll post as collateral, and for how long

The Loopscale Protocol supports both Market and Limit orders for borrowing and lending. Orders can be configured across multiple parameters to support specialized use cases, including undercollateralized borrowing, receivables finance, and more.

<AccordionGroup>
  <Accordion title="Primary Parameters" defaultOpen>
    <div className="hide-table-head" />

    |                                                    |                                                                                                                                                                                                                                                                 |
    | :------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
    | <div className="lg-cell"> **Repayment Type**</div> | <div className="grow-cell"><Tooltip tip="Periodic interest payments with a final principal payment at maturity"> Simple-Interest</Tooltip> or <Tooltip tip="Single repayment that includes all interest and principal at maturity"> Zero-Coupon</Tooltip></div> |
    | **Principal**                                      | Amount of principal being lent to the borrower                                                                                                                                                                                                                  |
    | **Principal Asset**                                | Currency of principal                                                                                                                                                                                                                                           |
    | **Collateral**                                     | Minimum amounts and mints of the collateral                                                                                                                                                                                                                     |
    | **APY**                                            | Annualized cost of funds over the loan term, expressed as a percentage.                                                                                                                                                                                         |
    | **Duration**                                       | Length of time of the loan contract                                                                                                                                                                                                                             |
    | **Principal Oracle**                               | Optional pricing oracle to calculate principal value                                                                                                                                                                                                            |
    | **Collateral Oracle**                              | Optional pricing oracle to calculate collateral value                                                                                                                                                                                                           |
  </Accordion>

  <Accordion title="Advanced Parameters">
    <div className="hide-table-head" />

    |                                                                                             |                                                                                                                                                                                                              |
    | :------------------------------------------------------------------------------------------ | :----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
    | <div className="lg-cell">**Repayment Frequency** </div>                                     | <div className="grow-cell"> Frequency of interest payments in Simple-Interest loan</div>                                                                                                                     |
    | **Default Type**                                                                            | <Tooltip tip="Defaults when the loan's LTV reaches the Liquidation Threshold"> Price-Based</Tooltip> and/or <Tooltip tip="Defaults when a borrower misses Max Outstanding Payments"> Payment-Based</Tooltip> |
    | **Auto-Liquidation**                                                                        | Enable third-party liquidators to repay lender in exchange for collateral in a default                                                                                                                       |
    | <Tooltip tip="If price-based defaults are enabled">**Liquidation Threshold**</Tooltip>      | Minimum ratio of collateral to debt that must be maintained by the borrower                                                                                                                                  |
    | <Tooltip tip="If payment-based defaults are enabled">**Max Outstanding Payments**</Tooltip> | Number of outstanding interest payments allowed prior to a payment-based default                                                                                                                             |
    | **Early Payment Penalty**                                                                   | A percentage of the original interest charged on early repaid principal                                                                                                                                      |
    | **Late Payment Penalty**                                                                    | A percentage of a late repayment is charged on late payments                                                                                                                                                 |
    | **Grace Period**                                                                            | Amount of time after a missed payment at which it is considered late                                                                                                                                         |
  </Accordion>
</AccordionGroup>

<Info>
  **Oracle-Agnostic Pricing**: Borrowers can set up loans that price their
  collateral or principal using custom or arbitrary oracles, enabling pricing
  for assets that may be illiquid or lack third-party oracle support. Loans may
  also be oracle-less, with borrowers proposing terms that solely default based
  on missed payments or loan expiry.
</Info>