> For the complete documentation index, see [llms.txt](https://docs-personal.isle.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs-personal.isle.finance/how-isle-personal-works/repayment-cycles-and-debt-status.md).

# Repayment Cycles and Debt Status

Unlike protocols where interest accrues continuously from the moment you borrow, Isle Personal works like a credit card: you have a repayment period, and as long as you repay before it ends, no interest is charged.

### Debt Lifecycle

When you borrow, your debt moves through three states over time:

```
┌─────────────────────────┐
│   CURRENT PERIOD DEBT   │ ← No interest
│   (Within your period)  │
└───────────┬─────────────┘
            │ Period ends
            ▼
┌─────────────────────────┐
│   GRACE PERIOD DEBT     │ ← Still no interest
│   (10 days after period)│
└───────────┬─────────────┘
            │ Grace period ends
            ▼
┌─────────────────────────┐
│   ACCUMULATED DEBT      │ ← Interest accrues!
│   (Borrow shares)       │
└─────────────────────────┘
```

**Current Period Debt** is debt borrowed within your active period. No interest applies as long as it's repaid before the period ends.

**Grace Period Debt** is debt that survived your period deadline. You have an additional 10-day window to repay without any interest.

**Accumulated Debt** is debt that missed both deadlines. Interest begins accruing from the moment the grace period ends—calculated on the elapsed time since that point, not from when you repay. The longer it goes unpaid, the more it compounds.

Because debt carries over across periods, you can hold debt in multiple states simultaneously—for example, accumulated debt from a missed deadline alongside fresh current period debt from a new borrow.

State transitions happen automatically whenever your position is interacted with (borrow, repay, etc.).

### Staggered Repayment Schedules

To prevent all borrowers from facing the same repayment deadline—which would create liquidity pressure at month-end—Isle Personal distributes users across four staggered periods. When you borrow for the first time, you are automatically assigned to a period based on the current date. This assignment is **permanent** for your position.

| Period   | Approximate Start | Duration  |
| -------- | ----------------- | --------- |
| Period 1 | Day 1 of month    | \~30 days |
| Period 2 | Day 8 of month    | \~30 days |
| Period 3 | Day 15 of month   | \~30 days |
| Period 4 | Day 22 of month   | \~30 days |

<details>

<summary>Example</summary>

Let's say you're assigned to **Period 2** starting January 8:

| Date           | Phase                      | Interest |
| -------------- | -------------------------- | -------- |
| Jan 8 - Feb 7  | **Current Period**         | None     |
| Feb 8 - Feb 17 | **Grace Period** (10 days) | None     |
| Feb 18+        | **Accumulated Debt**       | Accruing |

If you repay by February 17, you pay **zero interest**.

</details>

### Repayment Priority

When you repay, the protocol automatically clears your debt in the order that saves you the most money:

1. **Accumulated debt first** — interest-bearing debt is cleared before anything else
2. **Grace period debt second** — debt that has passed the deadline but not yet accruing interest
3. **Current period debt last** — debt still within the active repayment window

You never need to decide which debt to pay off first. The protocol always handles the most costly debt on your behalf.


---

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