> For the complete documentation index, see [llms.txt](https://mortgagefi-docs.gitbook.io/mortgagefi-documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://mortgagefi-docs.gitbook.io/mortgagefi-documentation/under-collateralized-loans/how-it-works.md).

# How it works

1. Vault Creation:

* Token projects can create a dedicated MortgageFi vault for their token
* This vault allows users to borrow against the project's token

2. Long-Term Borrowing:

* Community members can take out loans of up to 30 years using the project token
* Borrowed tokens are effectively removed from circulation for the loan duration

3. Gradual Token Lock-up:

* As more community members take loans, a larger portion of the token supply becomes locked
* This process can continue over time, potentially for decades


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