Making and managing debt positions.
After supplying collateral, users can begin borrowing assets of their choosing up to the limit set by their account's collateral factors. A users total borrow balance is determined by the sum of their currently borrowed amount plus the interest they have accrued. Do not ever borrow your total account liquidity, as it may result in immediate liquidation.
The borrow rate is the prevailing interest of the asset a user is borrowing. Every block a loan is opened, the borrow rate per block is multiplied by the accounts current borrow borrow to determine their borrow balance on the next block. As a result, the borrow balance is continuously compounding on every Ethereum block.
The borrower can choose to repay some or all of their borrow balance whenever they choose. The borrower is never required to pay back their borrow or the interest unless their accounts health factor is approaching 1.0. In this case they must either repay a portion of the balance or face liquidation.
Borrowed assets can be repaid in the front-end or directly through the lToken contract repayBorrow function. Once repaid, an account's collateral can be entirely redeemed by exchanging the existing lTokens for the underlying asset.
Users who borrow assets do not need to actively make payments, but they do need to actively monitor the health of their account. Price swings on both the supply and borrow sides of an account can have an adverse affect on overall health.