> For the complete documentation index, see [llms.txt](https://docs.teller.org/teller-lite/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.teller.org/teller-lite/dev-guide/borrow/executing-a-loan.md).

# Executing a Loan

Executing a loan requires the calculation of specific values and calling the function `acceptCommitment` on the `LenderCommitmentForwarderAlpha` contract. 

## Approval checks

Before executing the loan on chain 2 approvals must be completed.

### Collateral token Allowance 

The collateral token's allowance must be higher that the desired collateral for the transaction. The allowance must be set on the `collateralManagerAddress`.

To check the collateral token allowance  

```
functionName: "allowance",
arguments: [userAddress, collateralManagerAddress]
contract: collateralTokenAddress
```

To write the collateral token allowance: 

```
functionName: "approve",
arguments: [collateralManagerAddress, amountToApprove]
contract: collateralTokenAddress
```

The `collateralManagerAddress` can be found in the introduction of this guide

### Market Forwarder

The `MarketForwarder` for the offer's marketplace must be approved by the user.

To check if the `MarketForwarder` has been approved

```
functionName: "hasApprovedMarketForwarder",
arguments: [marketplaceId, commitmentForwarderAddress, userAddress],
contract: TellerV2
```

To approve the market forwarder

```
functionName: "approveMarketForwarder",
arguments: [marketplaceId, commitmentForwarderAddress],
contract: TellerV2
```

`marketplaceId` *and* `commitmentForwarderAddress` *both come from the loan offer query response.*

## Executing the loan

Once there is enough allowance on the collateral token and the `MarketForwarder` has been approved, the loan can be executed.

The function lives in the `LenderCommitmentForwarderAlpha` contract.

Detailed arguments

* `commitmentId`: The id of the commitment being accepted.
* `principalAmount`: The amount of currency to borrow for the loan.
  * This is is calculated as specified in this section: 
* `collateralAmount`: The amount of collateral to use for the loan.
  * This is inputted by the user
* `collateralTokenId`: The tokenId of collateral to use for the loan if ERC721 or ERC1155.
  * For tokens, this is `0`
* `collateralTokenAddress`: The contract address to use for the loan collateral token.s
* `interestRate`: The interest rate APY to use for the loan in basis points.
* `loanDuration`: The overall duration for the loan. Must be longer than market payment cycle duration.

```
functionName: "acceptCommitment",
arguments: [commitmentId, principalTokenValue, collateralTokenValue, 0, collateralTokenAddress,interestRate, loanDuration]
```

### Calculating `principalAmount`

To calculate the `principalAmount` from the `maxPrincipalPerCollateral` that comes from the offer query, all you need to do is multiply the `collateralAmount` by the `maxPrincipalPerCollateral` and then divide it by 10^18 since it's the expansion factor.

```typescript
const principalAmount = collateralAmount // requested collateral amount
    .mul(maxPrincipalPerCollateral) // this amount comes from the subgraph response for the particular offer
    .div(
      BigNumber.from(10).pow(18) // expansion factor
      )
    );
```