Repaying Loans

Flexible Repayment Options

Everst loans have no fixed term or payment schedule. Repay whenever you want, as much as you want. Interest accrues continuously until the loan is fully repaid.

How to Repay

Quick Steps

1. Ensure you have the borrowed asset in your wallet

2. Navigate to your Dashboard

3. Click "Repay" on the borrowed asset

4. Enter repayment amount

5. Approve and confirm transaction

Understanding Your Loan

Total Debt Composition

Your total debt consists of:

• Principal: Original borrowed amount

• Accrued Interest: Interest accumulated since borrowing

Interest compounds continuously with each block, growing your total debt over time.

Viewing Your Position

The Dashboard displays:

• Current debt balance (principal + interest)

• Interest rate (APY)

• Health Factor

• Total interest accrued

• Time since borrowing

Repayment Strategies

Full Repayment

Completely close your loan position:

• Repay principal plus all accrued interest

• Frees all collateral immediately

• Resets borrowing capacity

• Eliminates liquidation risk

When to use: Market uncertainty, achieved goals, or freeing collateral for other uses.

Partial Repayment

Reduce debt while maintaining position:

• Lower interest burden

• Improve Health Factor

• Free some collateral

• Maintain market exposure

When to use: Managing risk, taking profits, or responding to rate changes.

Interest-Only Payments

Pay accrued interest without reducing principal:

• Prevent debt growth

• Maintain constant leverage

• Preserve tax benefits

• Manage cash flow

When to use: Long-term positions or tax optimization strategies.

Step-by-Step Repayment Guide

Step 1: Prepare Repayment

Before repaying:

1. Check total debt amount

2. Ensure sufficient balance of borrowed asset

3. Add small buffer for interest accrual during transaction

4. Have native tokens for gas fees

Step 2: Calculate Repayment Amount

Decide how much to repay:

• Full repayment: Total debt + small buffer (0.01%)

• Partial repayment: Any amount up to total debt

• Target Health Factor: Calculate amount needed for desired HF

Step 3: Execute Repayment

1. Click "Repay" on borrowed asset

2. Enter repayment amount or click "Max"

3. First-time only: Approve token spending

4. Review transaction details:

   • Amount repaying

   • Remaining debt after

   • New Health Factor

5. Confirm transaction

6. Wait for confirmation

Step 4: Verify Results

After repayment:

• Check updated debt balance

• Verify Health Factor improvement

• Confirm collateral released (if full repayment)

• Review transaction on block explorer

Advanced Repayment Features

Repay with Collateral

Convert collateral directly to repay loans:

1. Select collateral asset to use

2. Protocol swaps to borrowed asset

3. Applies to loan balance

4. Single transaction convenience

Benefits: No external funds needed, gas efficient, immediate execution.

Flash Loan Repayment

For sophisticated users:

1. Flash borrow repayment amount

2. Repay Everst loan

3. Withdraw freed collateral

4. Repay flash loan with collateral

5. Keep remaining collateral

Use case: Deleveraging without external capital.

Automated Repayment

Coming soon:

• Schedule periodic payments

• Auto-repay at Health Factor thresholds

• Interest rate triggers

• Smart contract automation

Managing Interest Costs

Minimize Interest Paid

Strategies to reduce costs:

1. Repay high-rate loans first

2. Make frequent partial payments

3. Monitor rate changes

4. Refinance during low utilization

Interest Calculation

Your daily interest cost: Daily Interest = (Total Debt × Borrow APY) / 365

Interest costs vary based on your debt amount and the current variable APY. Check the app for current rates and use the formula above to calculate your costs.

Rate Shopping

Before repaying, consider:

• Current vs. historical rates

• Other protocol rates

• Expected rate movements

• Opportunity cost of repayment

Repayment Impact

On Health Factor

Repayment improves your Health Factor:

• Reduces borrowed amount (denominator)

• Maintains collateral value (numerator)

• Moves position away from liquidation

Health Factor Formula: New HF = (Collateral Value × Liquidation Threshold) / (Current Debt - Repayment Amount)

On Borrowing Power

After repayment:

• Restored borrowing capacity

• Can borrow same or different assets

• Improved rates due to better utilization

• Option to withdraw freed collateral

On Interest Rates

Large repayments may affect market rates:

• Reduces utilization rate

• May lower borrow APY

• Benefits future borrowers

• Consider timing for rate optimization

Common Scenarios

Scenario 1: Improving Health Factor

Your HF dropped to 1.15 (danger zone):

1. Calculate repayment needed for HF = 1.5

2. Repay that amount immediately

3. Monitor for further market movements

4. Consider additional safety buffer

Scenario 2: Taking Profits

Your collateral appreciated significantly:

1. Repay loan partially or fully

2. Withdraw appreciated collateral

3. Sell portion for profits

4. Maintain remaining position

Scenario 3: Rate Spike Response

Borrow rates jumped from 5% to 15%:

1. Evaluate if temporary or sustained

2. Consider full repayment if sustained

3. Wait if spike likely temporary

4. Compare with other protocols

Troubleshooting

"Insufficient Balance"

Problem: Not enough of borrowed asset to repay

Solutions:

• Acquire more of the asset

• Use partial repayment

• Swap other assets

• Use collateral swap feature

"Approval Required"

Problem: First repayment needs approval

Solutions:

1. Click "Approve" first

2. Wait for confirmation

3. Then proceed with repayment

4. One-time per asset

"Transaction Failed"

Problem: Various technical issues

Solutions:

• Increase gas limit

• Check token balance

• Verify network congestion

• Try smaller repayment amount

Tax Implications

Interest Deductibility

In some jurisdictions:

• Investment loan interest may be deductible

• Track all interest payments

• Maintain documentation

• Consult tax professional

Loan Closure Events

Repayment may trigger:

• Capital gains/losses on collateral

• Foreign exchange impacts

• DeFi-specific tax treatment

• Year-end tax planning

Best Practices

Regular Monitoring

• Check debt balance weekly

• Monitor interest accumulation

• Track Health Factor changes

• Set up alerts for thresholds

Strategic Timing

• Repay during low network activity

• Consider market conditions

• Watch for rate changes

• Plan around tax events

Risk Management

• Never let Health Factor below 1.3

• Keep emergency repayment funds

• Diversify across protocols

• Understand liquidation risks

After Repayment

Next Steps

If Fully Repaid:

• Withdraw collateral if desired

• Evaluate new opportunities

• Track tax implications

• Consider re-entering at better rates

If Partially Repaid:

• Monitor improved Health Factor

• Adjust position size if needed

• Set new repayment targets

• Continue risk management

Record Keeping

Document for your records:

• Transaction hashes

• Repayment amounts and dates

• Interest paid

• Remaining balances

• Tax documentation

Support Resources

Need help with repayments?

• FAQ Section

• Community Forums

• Video Tutorials (Coming Soon)

• Email: [e-mail]

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Loans can be repaid anytime without penalties. Interest accrues continuously until full repayment. Always maintain safe Health Factor levels.