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

# Interest Rates

> Understand how interest rates work on Creda Finance and what factors influence them

Rates on Creda are dynamic and driven by utilization: as more of an asset’s pool is borrowed, borrow rates rise to attract supply and encourage repayment; supply rates rise alongside.

## Core Ideas

* Utilization model: `utilization = borrowed / supplied`
* Rate curves: gentle at low utilization, steep near the top to protect liquidity
* Supply APY links to borrow APY: `supply ≈ borrow × utilization × (1 − reserve factor)`

Quick example:

```
At 80% utilization with 10% borrow APY and 15% reserve factor:
Supply APY ≈ 10% × 0.8 × 0.85 = 6.8%
```

## What To Watch

* Current utilization for assets you use
* Recent rate ranges (not single points)
* Protocol announcements that adjust parameters

## Practical Guidance

* Suppliers: diversify, avoid chasing spikes, and plan for variability
* Borrowers: budget for rate increases and keep health buffers
* Everyone: treat rates as changing bands; optimize without over‑trading

For more on collateral safety and liquidations, see the related concepts.