> For the complete documentation index, see [llms.txt](https://constant-finance.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://constant-finance.gitbook.io/docs/faq/repayment-and-positions.md).
# Repayment and Positions
[All FAQ topics](/docs/faq.md)
Select a question to reveal its answer.
Can I repay early? Is there a penalty?
Yes. You can repay before maturity and pay interest only through the time the repayment is processed on-chain. There is no minimum interest period, minimum interest charge, or early-repayment penalty.
For example, borrowing 1,000 USDC at 10% APR and repaying in full after 30 days would incur approximately 8.22 USDC in interest, using a 365-day year. The repayment would be approximately 1,008.22 USDC, plus transaction gas. The exact interest is calculated by the second and rounded to the token's smallest unit.
Can I repay part of my loan?
Yes. For each debt asset, your payment first covers accrued borrower interest. Any amount left over reduces principal. Future interest then accrues on the remaining principal at the same fixed rate.
If a payment does not cover all accrued interest, it does not reduce principal. Unpaid interest does not itself earn additional interest. See [Repayment and FIFO Settlement](/docs/introduction/concepts/repayment-and-fifo-settlement.md).
What fees should I expect?
There are three main types of costs:
* **Protocol interest fee.** The protocol retains a configured percentage of the interest paid by the borrower, with the remaining interest allocated to the supplier. This fee is already included in the agreed borrower interest, so it is not an extra charge on top.
* **Origination fee.** A one-time fee may be charged when a loan opens, depending on protocol configuration. It is separate from interest. The Basic origination fee was **0** in the documented Sepolia deployment snapshot. If charged, it is not refunded or prorated for the unused term when you repay early.
* **Network gas.** On-chain transactions require network gas. Repaying early does not refund gas spent on earlier transactions, and the repayment transaction itself also requires gas.
See [Risk Configuration](/docs/introduction/deployment/risk-configuration.md) for the dated fee settings. Those testnet settings should not be treated as a promise of future fees.
What is refinancing, and why would I use it?
Refinancing replaces an existing loan with a new one under newly agreed terms, such as a different fixed rate or maturity. It requires compatible new funding, which is used to settle the old loan's outstanding principal and accrued interest.
In the refinancing flow covered here, the old Position closes and the replacement opens in one transaction. If any part fails, neither change takes effect. Refinancing does not change the old agreement in place or guarantee that a better rate will be available. See [Refinance](/docs/introduction/concepts/refinance.md).
What is a Constant NFT, and why did I receive one?
When your supply is matched, you receive a Constant NFT representing your supplier claim. `ConstNFT` is its smart-contract name.
The NFT gives its current owner the right to claim amounts settled for that supplier claim. It represents a claim under the protocol rather than ownership of the borrower's collateral, and the final claimable amount depends on how the Position is ultimately settled. Early repayment can shorten the period over which you earn interest.
Repayment and receipt in your wallet are separate steps. Settled funds become claimable through the NFT. See [Constant NFT](/docs/introduction/concepts/constant-nft.md).
Can I sell my supplier position before maturity?
A Constant NFT is transferable, and transferring it passes the associated claim to the new owner, including amounts already recorded but not yet claimed.
Selling requires a willing buyer and an agreed price. Transferability does not guarantee immediate liquidity, a sale at face value, or an available Position Swap market in the documented deployment. It also does not force the borrower to repay early.
What triggers liquidation?
A Position becomes eligible for liquidation when its debt exceeds the limit supported by its collateral under the configured risk settings, or when it passes maturity with debt still unpaid. A healthy collateral ratio does not prevent liquidation after maturity.
Anyone can initiate liquidation when a Position is eligible. The liquidator repays debt and receives eligible collateral within the protocol's rules. Someone must submit a transaction to carry this out; reaching the threshold does not automatically close the loan.
Monitor both your Position's health and its maturity. Liquidation can result in collateral losses and does not guarantee full recovery for suppliers. See [Liquidations](/docs/introduction/concepts/liquidations.md).
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