# Interest Rates ## How do loan interest rates work? YieldBlox's interest rates are based on demand and will fluctuate based on the borrowed assets utilization ratio. Interest rates accrue onto the borrower's liability balance over the lifecycle of their loans. Interest does not need to be repaid until loan repayment. ## What is a Utilization Ratio? An assets [utilization ratio](/technical-docs/math.md#utilization-ratio-calculations) is the percentage of deposited assets in the pool that are currently lent out. It is used to calculate the [variable interest rate](/technical-docs/math.md#interest-rate-calculations) paid by borrowers. ## Where do the interest fees go? The fees generated by interest are paid to the lending pool. Lenders will receive these fees when they burn the pool tokens they received by lending. Additionally, the underlying assets YBX fee allocation value is greater than 0, a corresponding portion of interest fees are used to repurchase and distribute YBX to [YBX escrows](/user-docs/escrowing.md). For example if an assets YBX fee allocation is set to .1, 10% of interest paid by borrowers of that asset is used to purchase YBX and send it to the YBX escrow pool, which will distribute the YBX to escrows when they burn their veYBX upon escrow unlock. YBX fee allocations are set by [YieldBlox Governance](/user-docs/governance.md). --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.ybx.script3.io/user-docs/lending-borrowing/interest-rates.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.