# What are min/max limits for loan?

Here is a table displaying the nature of the Maximum and Minimum limit of transactions on the platform for the loan of different currencies accounting the volatility of these tokens:
loan_buffer: When the collateral value drops below 100% + (loan_premium)% + (loan_buffer)% of the loan value in real-time, then your loan enters the critical region and gets liquidated by one of the relayers.

max_loan_leverage = While creating a new loan, the maximum loan value that can be taken for a particular collateral value. If max_loan_leverage = 0.5x, max 1 ETH loan can be taken with collateral worth 2 ETH in any currency.

max_loan_in_eth: The maximum amount of loan allowed in the value of Ether.

min_loan_in_eth: The minimum amount of loan allowed in the value of Ether.

Loan Example:

For a 1 month loan with 1% premium, if collateral currency = LINK and loan currency = DAI:

Given, 1 LINK = \$3, 1 ETH = \$300, 1 DAI = \$1

=> 1 ETH = 100 LINK

=> 1 ETH = 300 DAI

1. Max Loan Amount allowed while creation = MIN(max_loan_in_eth for loan currency, max_loan_in_eth for collateral currency) = MIN(max_loan_in_eth for DAI, max_loan_in_eth for LINK) = MIN(20 ETH, 10 ETH) = 10 ETH equivalet of DAI = 10 * 300 = 3000 DAI

2. Max Leverage allowed while creation = MIN(max_loan_leverage for DAI, max_loan_leverage for LINK) = MIN(0.7, 0.5) = 0.5

3. Buffer considered for auto-liquidation = MAX(loan_buffer for DAI, loan_buffer for LINK)% = MAX(15, 50)% = 50%

4. Collateral Amount to be put during creation = (Max Loan Amount {1}) * (Max Leverage {2}) in LINK = 3000 DAI * 0.5 = 1500 DAI = 1500 / 3 LINK = 500 LINK

5. Default Limit while auto-liquidation: (100 + premium + buffer) * loanAmount / (100 * collateralAmount) >= collateral_currency_price / loan_currency_price

=> ((100 + 1 + 50) * 3000) DAI / (100 * 500 * 3) DAI >= collateral_currency_price / loan_currency_price

=> 453000 / 150000 >= collateral_currency_price / loan_currency_price

=> 3.02 >= collateral_currency_price / loan_currency_price

If the above condition is true then the loan gets liquidated.  