diff --git a/functions/src/index.ts b/functions/src/index.ts
index dcd50e66..b5a23fba 100644
--- a/functions/src/index.ts
+++ b/functions/src/index.ts
@@ -16,6 +16,7 @@ export * from './on-view'
 export * from './unsubscribe'
 export * from './update-metrics'
 export * from './update-stats'
+export * from './update-loans'
 export * from './backup-db'
 export * from './change-user-info'
 export * from './market-close-notifications'
diff --git a/functions/src/update-loans.ts b/functions/src/update-loans.ts
new file mode 100644
index 00000000..7e442a8f
--- /dev/null
+++ b/functions/src/update-loans.ts
@@ -0,0 +1,137 @@
+import * as functions from 'firebase-functions'
+import * as admin from 'firebase-admin'
+import { getValues, log, writeAsync } from './utils'
+import { Bet } from 'common/bet'
+import { Contract, CPMMContract, FreeResponseContract } from 'common/contract'
+import { User } from 'common/user'
+import { Dictionary, groupBy, keyBy, minBy, sumBy } from 'lodash'
+import { filterDefined } from 'common/util/array'
+import { getContractBetMetrics } from 'common/calculate'
+import { calculateCpmmSale } from 'common/calculate-cpmm'
+import { calculateDpmSaleAmount } from 'common/calculate-dpm'
+
+const firestore = admin.firestore()
+
+export const updateLoans = functions
+  .runWith({ memory: '1GB', timeoutSeconds: 540 })
+  // Run every Sunday, at 11:59pm.
+  .pubsub.schedule('59 11 * * 0')
+  .timeZone('America/Los_Angeles')
+  .onRun(updateLoansCore)
+
+async function updateLoansCore() {
+  const [users, contracts, bets] = await Promise.all([
+    getValues<User>(firestore.collection('users')),
+    getValues<Contract>(
+      firestore.collection('contracts').where('isResolved', '==', false)
+    ),
+    getValues<Bet>(firestore.collectionGroup('bets')),
+  ])
+  log(
+    `Loaded ${users.length} users, ${contracts.length} contracts, and ${bets.length} bets.`
+  )
+
+  const contractsById = keyBy(contracts, (contract) => contract.id)
+  const betsByUser = groupBy(bets, (bet) => bet.userId)
+
+  const userLoanUpdates = users.map((user) =>
+    getUserLoanUpdates(betsByUser[user.id] ?? [], contractsById).betUpdates
+  ).flat()
+
+  const betUpdates = userLoanUpdates
+    .map((update) => ({
+      doc: firestore
+        .collection('contracts')
+        .doc(update.contractId)
+        .collection('bets')
+        .doc(update.betId),
+      fields: {
+        loanAmount: update.loanTotal,
+      },
+    }))
+
+  await writeAsync(firestore, betUpdates)
+}
+
+const getUserLoanUpdates = (
+  bets: Bet[],
+  contractsById: Dictionary<Contract>
+) => {
+  const betsByContract = groupBy(bets, (bet) => bet.contractId)
+  const contracts = filterDefined(
+    Object.keys(betsByContract).map((contractId) => contractsById[contractId])
+  )
+
+  const betUpdates = filterDefined(
+    contracts
+      .map((c) => {
+        if (c.outcomeType === 'BINARY' && c.mechanism === 'cpmm-1') {
+          return getBinaryContractLoanUpdate(c, betsByContract[c.id])
+        } else if (c.outcomeType === 'FREE_RESPONSE')
+          return getFreeResponseContractLoanUpdate(c, betsByContract[c.id])
+        else {
+          throw new Error(`Unsupported contract type: ${c.outcomeType}`)
+        }
+      })
+      .flat()
+  )
+
+  const totalNewLoan = sumBy(betUpdates, (loanUpdate) => loanUpdate.loanTotal)
+
+  return {
+    totalNewLoan,
+    betUpdates,
+  }
+}
+
+const getBinaryContractLoanUpdate = (contract: CPMMContract, bets: Bet[]) => {
+  const { totalShares } = getContractBetMetrics(contract, bets)
+  const { YES, NO } = totalShares
+
+  const shares = YES || NO
+  const outcome = YES ? 'YES' : 'NO'
+
+  const { saleValue } = calculateCpmmSale(contract, shares, outcome)
+  const loanAmount = sumBy(bets, (bet) => bet.loanAmount ?? 0)
+  const oldestBet = minBy(bets, (bet) => bet.createdTime)
+
+  const newLoan = calculateNewLoan(saleValue, loanAmount)
+  if (newLoan <= 0 || !oldestBet) return undefined
+
+  const loanTotal = (oldestBet.loanAmount ?? 0) + newLoan
+
+  return {
+    userId: oldestBet.userId,
+    contractId: contract.id,
+    betId: oldestBet.id,
+    newLoan,
+    loanTotal,
+  }
+}
+
+const getFreeResponseContractLoanUpdate = (
+  contract: FreeResponseContract,
+  bets: Bet[]
+) => {
+  return bets.map((bet) => {
+    const saleValue = calculateDpmSaleAmount(contract, bet)
+    const loanAmount = bet.loanAmount ?? 0
+    const newLoan = calculateNewLoan(saleValue, loanAmount)
+    const loanTotal = loanAmount + newLoan
+
+    return {
+      userId: bet.userId,
+      contractId: contract.id,
+      betId: bet.id,
+      newLoan,
+      loanTotal,
+    }
+  })
+}
+
+const LOAN_WEEKLY_RATE = 0.05
+
+const calculateNewLoan = (saleValue: number, loanTotal: number) => {
+  const netValue = saleValue - loanTotal
+  return netValue * LOAN_WEEKLY_RATE
+}