Free Tool

Health Factor Calculator

Check if your Aave or DeFi lending position is safe from liquidation. Enter your collateral and debt to instantly see your Health Factor and risk level.

Your Collateral

Liq. Threshold: 83% | Max LTV: 80%

Your Debt

$

Quick Scenarios

Health Factor

Moderate Risk

1.45

At risk - take action

Liquidation (1.0)Target (1.5+)Safe (2.0+)

Position Summary

Total Collateral

$35,000.00

Total Debt

$20,000.00

Available to Borrow

$8,000.00

Current LTV

57.1%

Liquidation Threshold$29,050.00
Max Borrowable$28,000.00
Weighted Liq. Threshold83.0%

Recommendations

  • Your position is moderately risky. Monitor closely during market volatility.

How to Improve Health Factor

Add More Collateral

Deposit more assets to increase your collateral value

Repay Some Debt

Reduce your borrowed amount to lower risk

Want to Practice Strategies?

Try our full Aave Simulator to practice lending, borrowing, and managing positions with real-time data.

What is Health Factor?

Health Factor (HF) is the single most important metric for anyone using DeFi lending protocols like Aave. It tells you how safe your position is from liquidation.

The Formula

Health Factor = (Collateral Value × Liquidation Threshold) / Total Debt

Think of Health Factor as a safety margin. The higher the number, the safer your position. When it drops below 1, your collateral can be liquidated.

Understanding Health Factor Levels

≥ 2.0Safe

Excellent safety margin. Your position can withstand significant price drops without risk of liquidation.

1.5 - 2.0Moderate

Acceptable but not ideal. Monitor during high volatility and consider improving your position.

1.1 - 1.5High Risk

Risky position. A moderate price drop could trigger liquidation. Take action to improve your HF.

< 1.1Danger

Critical! Liquidation is imminent. Add collateral or repay debt immediately to save your position.

How to Improve Your Health Factor

Add More Collateral

Depositing additional assets increases your collateral value, which directly improves your Health Factor. This is often the fastest way to escape danger.

Repay Some Debt

Reducing your borrowed amount lowers the denominator in the Health Factor formula, improving your ratio. Even partial repayment helps.

Swap to Higher LT Assets

Some assets have higher liquidation thresholds than others. Swapping to assets with better parameters can improve your overall Health Factor.

Example Calculation

Let's say you have:

  • 10 ETH as collateral (worth $35,000 at $3,500/ETH)
  • ETH has 83% liquidation threshold on Aave
  • You borrowed $20,000 USDC

Health Factor = (Collateral × Liq. Threshold) / Debt

Health Factor = ($35,000 × 0.83) / $20,000

Health Factor = $29,050 / $20,000

Health Factor = 1.45

At 1.45, this position is in the "moderate risk" zone. It's safe for now but could become risky if ETH drops significantly.

Frequently Asked Questions

What is Health Factor in DeFi?

Health Factor (HF) is a number that represents the safety of your collateralized position in DeFi lending protocols like Aave. It's calculated by dividing your weighted collateral value by your total debt. A Health Factor above 1 means your position is safe; below 1 means you can be liquidated.

What is a good Health Factor?

A Health Factor of 2.0 or higher is considered safe. Between 1.5-2.0 is acceptable but should be monitored. Between 1.1-1.5 is risky and you should consider adding collateral or repaying debt. Below 1.1 is dangerous and requires immediate action.

What happens when Health Factor goes below 1?

When your Health Factor drops below 1, your position becomes eligible for liquidation. Liquidators can repay up to 50% of your debt and claim your collateral plus a liquidation bonus (typically 5-10%). You lose part of your collateral and pay a penalty, so it's important to keep your HF above 1.

Why does each token have a different liquidation threshold?

Different tokens have different risk profiles based on their volatility, liquidity, and market cap. Stablecoins like USDC have higher thresholds (80%) because they don't fluctuate much. Volatile tokens like LINK have lower thresholds (68%) to account for larger price swings. ETH is in between at 83% due to its high liquidity and moderate volatility.