Borrowing guide
Plan the debt before you borrow.
A loan gives you cash or more buying power today. It also creates debt, variable interest, and liquidation risk. The useful question is what you want the loan to do and how you want it handled when you are away.
What is the money for?
Borrowing to spend sends cash out while the collateral and loan remain. Borrowing to invest buys more assets but also increases price exposure. Depositing without borrowing is a valid choice. None of these paths guarantees a better return.
What will repay the debt?
You can plan to add new money, sell some assets under rules you approve, or combine the two. New money is the only option here that reduces debt without selling existing assets. A future deposit is never certain and should not be counted as cash already available.
What if you stop adding money?
Decide in advance whether approved rules may sell collateral to reduce the loan. Those sales could occur at a loss. Reducing debt and then borrowing again is a separate choice that needs limits, costs, and permission; it is not an automatic consequence of a repayment plan.
How do you know the plan is active?
A conversation or saved draft does not move funds or activate protection. Before acting, check the account, chain, supported collateral, current health factor, projected debt, interest, Stack fees, gas, slippage, transaction permissions, and the receipt after execution.
What history can tell you
A fair backtest compares the same contributions and dates, then subtracts remaining debt, interest, fees, gas and trading costs. It also reports drawdowns and any liquidation or missed action. Stack's public research sample currently verifies a narrow Aave interest calculation; it does not prove that one repayment or reborrowing rule is best.
Protection reduces risk only when the authorized action can execute. Price gaps, changing Aave rules, unavailable services, transaction failures, and insufficient liquidity can still lead to liquidation. This guide is educational; the current account and market must be checked before any transaction.