How do other banks manage customers making principal payments on interest only construction loans?  Do you prepay interest which creates negative interest or do you allow your customers to reduce principal which may impact the permanent loan at conversion?  Do you impose a prepayment penalty?

Any help is appreciated!

Just curious to see if anyone has any input (policies, risk assessments, etc.) on Issuing/Acquiring that they are willing to share or collaborate on? Currently working with Visa and MasterCard but always open to lessons learned and best practices. Thanks in advance.