diff --git a/apps/data_handler/tests/test_health_ratio_tests.py b/apps/data_handler/tests/test_health_ratio_tests.py
new file mode 100644
index 00000000..5b3a9597
--- /dev/null
+++ b/apps/data_handler/tests/test_health_ratio_tests.py
@@ -0,0 +1,162 @@
+"""Test the health ratio handlers"""
+
+import pytest
+from decimal import Decimal
+from unittest.mock import MagicMock, patch
+from datetime import datetime
+
+from data_handler.handlers.health_ratio_level.health_ratio_handlers import (
+    BaseHealthRatioHandler,
+)
+from shared.state import State, LoanEntity
+from shared.types import TokenValues
+from shared.constants import ProtocolIDs
+
+
+class MockState(State):
+    """Mock State class for testing"""
+
+    def __init__(self):
+        self.loan_entities = {}
+        self.collateral_interest_rate_models = None
+        self.debt_interest_rate_models = None
+        self.interest_rate_models = MagicMock(collateral={}, debt={})
+
+    def compute_liquidable_debt_at_price(self, *args, **kwargs):
+        """Mock implementation of abstract method"""
+        return Decimal("100.0")
+
+
+class MockLoanEntity(LoanEntity):
+    """Mock LoanEntity class for testing"""
+
+    def __init__(self):
+        self.debt = None
+        self.collateral = None
+
+    def compute_collateral_usd(self, **kwargs):
+        return Decimal("1000.0")
+
+    def compute_debt_usd(self, **kwargs):
+        return Decimal("500.0")
+
+    def compute_health_factor(self, **kwargs):
+        return Decimal("2.0")
+
+    def compute_liquidable_debt_at_price(self, *args, **kwargs):
+        """Mock implementation of abstract method"""
+        return Decimal("100.0")
+
+    def compute_debt_to_be_liquidated(self, *args, **kwargs):
+        """Mock implementation of abstract method"""
+        return Decimal("50.0")
+
+
+@pytest.fixture
+def mock_loan_data():
+    """Fixture for sample loan data"""
+    return [
+        MagicMock(
+            user="user1",
+            debt={"ETH": Decimal("1.5")},
+            collateral={"USDC": Decimal("3000")},
+        ),
+        MagicMock(
+            user="user2",
+            debt={"ETH": Decimal("2.0")},
+            collateral={"USDC": Decimal("4000")},
+        ),
+    ]
+
+
+class TestBaseHealthRatioHandler:
+
+    @pytest.fixture(autouse=True)
+    def setup(self, mock_db_connector):
+        """Setup test instance"""
+        with patch(
+            "data_handler.handlers.health_ratio_level.health_ratio_handlers.DBConnector"
+        ) as mock_db:
+            mock_db.return_value = mock_db_connector
+            self.handler = BaseHealthRatioHandler(
+                state_class=MockState, loan_entity_class=MockLoanEntity
+            )
+            self.handler.db_connector = mock_db_connector
+
+    def test_fetch_data(self, mock_db_connector):
+        """Test fetch_data method"""
+        mock_db_connector.get_latest_block_loans.return_value = []
+        mock_db_connector.get_last_interest_rate_record_by_protocol_id.return_value = (
+            MagicMock(
+                collateral={"USDC": Decimal("0.05")}, debt={"ETH": Decimal("0.08")}
+            )
+        )
+
+        loan_states, interest_rates = self.handler.fetch_data(ProtocolIDs.ZKLEND)
+
+        assert mock_db_connector.get_latest_block_loans.called
+        assert mock_db_connector.get_last_interest_rate_record_by_protocol_id.called
+        assert isinstance(interest_rates.collateral, dict)
+        assert isinstance(interest_rates.debt, dict)
+
+    def test_initialize_loan_entities(self, mock_loan_data):
+        """Test initialize_loan_entities method"""
+        state = MockState()
+        result = self.handler.initialize_loan_entities(state, mock_loan_data)
+
+        assert len(result.loan_entities) == 2
+        assert "user1" in result.loan_entities
+        assert "user2" in result.loan_entities
+
+        user1_entity = result.loan_entities["user1"]
+        assert isinstance(user1_entity.debt, TokenValues)
+        assert isinstance(user1_entity.collateral, TokenValues)
+        assert user1_entity.debt.values["ETH"] == Decimal("1.5")
+        assert user1_entity.collateral.values["USDC"] == Decimal("3000")
+
+    def test_initialize_loan_entities_with_empty_data(self):
+        """Test initialize_loan_entities with empty data"""
+        state = MockState()
+        result = self.handler.initialize_loan_entities(state, [])
+        assert len(result.loan_entities) == 0
+
+    @pytest.mark.parametrize(
+        "health_ratio,expected",
+        [
+            (Decimal("1.5"), True),
+            (Decimal("0.8"), True),
+            (Decimal("0"), False),
+            (Decimal("-1"), False),
+            (Decimal("Infinity"), False),
+        ],
+    )
+    def test_health_ratio_is_valid(self, health_ratio, expected):
+        """Test health_ratio_is_valid with various inputs"""
+        assert self.handler.health_ratio_is_valid(health_ratio) == expected
+
+    def test_fetch_data_handles_db_error(self, mock_db_connector):
+        """Test fetch_data error handling"""
+        mock_db_connector.get_latest_block_loans.side_effect = Exception(
+            "Database error"
+        )
+
+        with pytest.raises(Exception) as exc_info:
+            self.handler.fetch_data(ProtocolIDs.ZKLEND)
+        assert "Database error" in str(exc_info.value)
+
+    def test_initialize_loan_entities_maintains_existing_state(self, mock_loan_data):
+        """Test that initialize_loan_entities preserves existing state"""
+        state = MockState()
+        # Add pre-existing data
+        existing_entity = MockLoanEntity()
+        existing_entity.debt = TokenValues(values={"BTC": Decimal("1.0")})
+        existing_entity.collateral = TokenValues(values={"ETH": Decimal("10.0")})
+        state.loan_entities["existing_user"] = existing_entity
+
+        result_state = self.handler.initialize_loan_entities(state, mock_loan_data)
+
+        assert len(result_state.loan_entities) == 3
+        assert "existing_user" in result_state.loan_entities
+        assert result_state.loan_entities["existing_user"].debt.values[
+            "BTC"
+        ] == Decimal("1.0")