> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tythe.finance/llms.txt
> Use this file to discover all available pages before exploring further.
# Borrow
> Fixed-rate, fixed-term credit against your Credit Limit: how a Loan is drawn, what Coverage costs you, how capture repays it, and what happens if it defaults.
Credit is the one financial product Tythe builds itself. You are underwritten for a Credit Limit; you or your agents draw Loans against it; each Loan has a rate and a term fixed the moment it is drawn; repayment comes from your revenue as it arrives. This page is the full lifecycle from a principal's side.
### What a Loan is
A Loan is a discrete draw, not a revolving line.
| Property | Fixed at origination | Changes later |
| ------------------ | ----------------------------------------------------------------------------- | ----------------------------------------------- |
| Principal | The amount you drew | No |
| APR | From your Credit Rating band and the term you chose | Never, for the life of the Loan |
| Term | One of the available tenors, up to any maximum in the drawing agent's mandate | No |
| Schedule and floor | The amount due per period and the minimum that must arrive | No |
| Lien | A fraction of your balance, set by your band | Released on repayment; consumed only on default |
Your Credit Limit caps what you can have outstanding across all Loans at once. Drawing does not consume a line; it creates a new fixed instrument.
### Drawing
It governs every Loan you or your agents ever draw: the lien as a security interest, capture, default and recourse, governing law, and that Loans drawn by your mandated agents bind you.
You draw from the console, or an agent draws within its credit share and its maximum term. The APR is computed from your band and the term; there is nothing to negotiate.
Your profile must be verified and current. Outstanding plus the new amount must be within your Credit Limit. The first-loss reserve must be above its floor. The market must have liquidity. Your idle balance must cover the lien.
The lien is placed on your balance and the principal is disbursed into your account, tagged as a Loan disbursement, which is never treated as revenue. A Loan Schedule records the terms.
If any check fails, the draw fails and tells you which one.
### What it costs
| Item | Amount |
| ------------------------------------ | --------------------------------------------------------------- |
| Interest | The fixed APR for the life of the Loan |
| Late fee | Capped, on a missed payment; no compounding and no penalty rate |
| Origination, application, prepayment | None |
You can repay early at any time with no penalty. Repaying in full releases the lien.
### Coverage: the lien on your own balance
Coverage on Tythe is not collateral you post somewhere and not a claim over money Tythe holds. It is a lien you grant over a fraction of your own account balance at origination.
* The fraction comes from your Credit Rating band. A thinner band pledges more.
* The liened amount is not withdrawable and cannot be reserved by a mandate while the Loan is open. Everything else in your account stays free: you can still pay, delegate, save, and lend with it.
* Only the loss waterfall can consume it, only on default, and only up to the shortfall.
* It is released the moment the Loan closes.
### Capture: how a Loan repays
Repayment is pulled from your revenue as it arrives, not billed to you at the end of a month.
* Only inflows tagged as revenue are captured: x402 receipts, venue yield, and inbound transfers the Intelligence Layer classifies as revenue. Operator deposits and Loan disbursements never are.
* Capture takes the scheduled amount for the period, plus any arrears, and no more. It can never take from liened or reserved balance, and it stops at what is owed.
* A period in which the floor is not met is a missed payment.
* If a revenue tag is wrong, dispute it from the console; capture on that inflow pauses until the dispute resolves.
An agent can also repay directly if its mandate permits the credit-repay rail.
### If you miss a payment
A capped late fee applies. No compounding, no penalty rate. Capture keeps working to clear the arrears as revenue arrives.
If arrears continue beyond the window in your Loan Schedule, the Loan is marked in default.
In one transaction: remaining captured revenue, then your lien, then a recorded legal claim against you under the Master Credit Agreement, then Tythe's first-loss reserve, and only then lenders.
Recovery is pursued against you. Recoveries unwind the loss in reverse, lenders first, then the reserve. The default is recorded and affects your Credit Rating.
Tythe's own capital is consumed before any lender's. That does not make a default cheap for you: your lien is consumed first, and the claim against you is real.
### Agents drawing on your behalf
An agent draws only within its effective credit share, a fraction of your available Credit Limit per period, and only up to the maximum term in its mandate. The borrower of record is always you. If your Credit Limit falls on a re-rating, every agent's drawable amount falls with it in the same block, while existing Loans keep their terms.
An agent that draws well repays well: repayment history is the strongest input to your Credit Rating and a direct input to that agent's Conduct Rating.
### What gates a draw besides your limit
* **The reserve floor.** If the first-loss reserve is below its floor relative to the book, origination throttles and then halts until protocol revenue refills it. Existing Loans and capture are unaffected.
* **Market liquidity.** Loans are funded by lenders. A draw needs available liquidity in the market.
* **Your profile.** A stale or suspended profile cannot draw.
How your Credit Rating and Credit Limit are set and what moves them.
The waterfall and the reserve in full.