> 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/liquidations.md).
# Liquidations
Teller replaces price-based liquidation pools by utilizing fixed collateral and fixed duration loans in concentrated liquidity order books.
Time-based liquidation enables more flexible collateral options for borrowers and LPs can regularly earn above money market rates with decreased risk.
### **What is time-based liquidation?**
Loans are only vulnerable to liquidation if a borrower fails to make a scheduled repayment.
Unlike price-based liquidation pools that rely on health factors or other collateral factors, any change in the underlying value of the collateral does not trigger liquidation on Teller.
If a borrower doesn’t make a scheduled repayment after a pre-determined due date (plus a grace period), the loan will default.
### **What happens if a loan defaults?**
After default, a liquidator can repay the loan on the borrower’s behalf and seize **100%** of the collateral associated with the loan.
The lender can also close the loan without repayment and seize **all of the collateral.**
(On a per-wallet basis.)
### **Is there a liquidation penalty?**
After liquidation, **all** the collateral associated with a loan is seized and transferred to the liquidator. Other than that, there are no additional liquidation fees.
### **How do I avoid liquidation?**
If scheduled loan repayments are made on time, there is no price-based risk of liquidation.
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