# How do I pay interest or repay principal?
Category: Borrow
Source: https://strike.me/int/en/support/how-do-i-pay-interest-or-repay-principal/
---
| Product | Interest due | Interest payment methods | Principal due | Principal payment methods |
|---|---|---|---|---|
| Term loan | Monthly or at maturity | • Cash balance
• bitcoin collateral
• bitcoin balance (only for monthly interest payments) | 12 months after opening, unless [refinanced](/support/can-i-refinance-my-loan) | • Cash balance
• bitcoin collateral |
## How to repay principal
You can pay down at maturity from any payment method or at any time from your cash balance. There are **no prepayment penalties**. Lowering the outstanding balance due at maturity:
- Improves your loan-to-value (LTV) ratio, potentially [unlocking some of your collateral](/support/can-i-retrieve-collateral-from-an-open-loan-or-line-of-credit).
- Lowers your [margin call and liquidation](/support/how-do-margin-calls-and-liquidations-happen) price thresholds.
- Reduces your daily interest accrual going forward.
Say you open a payment-at-maturity loan for 10.000 USDT at [a 14% Annual Percentage Rate (APR)](/support/what-are-the-interest-rates-for-borrowing-against-bitcoin). With no early repayments, you would pay 1.400 USDT in interest at the end of the term. By repaying 2.000 USDT after 6 months, interest would continue to accrue on the 8.000 USDT until the end of the term, for a total of 1.260 USDT at maturity.
Repaying 100% of your principal early does not automatically close your loan. You must formally [close it](/support/how-do-i-close-a-loan-or-line-of-credit) to recover all of your bitcoin collateral.
## How to pay interest
You can change the interest and principal payment method at any time. You can’t split interest payment between methods.
## What happens if a payment fails
Interest or maturity payments may fail due to insufficient cash or bitcoin balance. If you experience repeated issues, [contact support](/support/how-do-i-contact-support).
If you miss a payment, you have a 10-day grace period. After that, we’ll [liquidate](/support/how-do-margin-calls-and-liquidations-happen) enough bitcoin collateral to cover the overdue amount.
From Strike's help center — https://strike.me/int/en/support/