diff --git a/contracts/loan_manager/src/lib.rs b/contracts/loan_manager/src/lib.rs
index 37b9e7f7..6bd112ce 100644
--- a/contracts/loan_manager/src/lib.rs
+++ b/contracts/loan_manager/src/lib.rs
@@ -569,18 +569,18 @@ impl LoanManager {
         }
 
         let remaining_principal = Self::remaining_principal(loan);
-        let debt_before_late_fees = remaining_principal
-            .checked_add(loan.accrued_interest)
-            .expect("debt overflow");
 
-        // Stop accruing fees if principal + interest is fully paid
-        if debt_before_late_fees <= 0 {
+        // Stop accruing fees if principal is fully paid
+        if remaining_principal <= 0 {
             loan.last_late_fee_ledger = current_ledger;
             return 0;
         }
 
         let overdue_ledgers = current_ledger - late_fee_start;
-        let incremental_fee = debt_before_late_fees
+        // Late fee is calculated on original principal amount only, not remaining debt.
+        // This ensures the 25% late fee cap is meaningful regardless of payment state.
+        let incremental_fee = loan
+            .amount
             .checked_mul(Self::late_fee_rate_bps(env) as i128)
             .and_then(|value| value.checked_mul(overdue_ledgers as i128))
             .and_then(|value| value.checked_div(10_000))
diff --git a/frontend/src/app/[locale]/lend/LendPageClient.tsx b/frontend/src/app/[locale]/lend/LendPageClient.tsx
index cd811d0e..42fa11b1 100644
--- a/frontend/src/app/[locale]/lend/LendPageClient.tsx
+++ b/frontend/src/app/[locale]/lend/LendPageClient.tsx
@@ -37,6 +37,8 @@ import {
   getPrecisionError,
   parseAmount,
   sanitizeAmountInput,
+  formatAmountOnBlur,
+  getAssetDecimals,
 } from "../../utils/amount";
 
 const API_URL = process.env.NEXT_PUBLIC_API_URL ?? "http://localhost:3001";
@@ -72,8 +74,10 @@ export function LendPageClient() {
 
   const depositPrecisionError = getPrecisionError(depositAmount, "USDC");
   const withdrawPrecisionError = getPrecisionError(withdrawAmount, "USDC");
-  const depositHelper = buildAmountHelperText(depositAmount, "USDC");
-  const withdrawHelper = buildAmountHelperText(withdrawAmount, "USDC");
+  const depositDecimals = getAssetDecimals("USDC");
+  const withdrawDecimals = getAssetDecimals("USDC");
+  const depositHelper = buildAmountHelperText(depositAmount, "USDC", depositDecimals);
+  const withdrawHelper = buildAmountHelperText(withdrawAmount, "USDC", withdrawDecimals);
 
   const handleDeposit = async () => {
     const amount = parseAmount(depositAmount);
@@ -312,9 +316,15 @@ export function LendPageClient() {
                     type="text"
                     inputMode="decimal"
                     min="0"
-                    step="0.0000001"
+                    step={Math.pow(10, -depositDecimals)}
                     value={depositAmount}
                     onChange={(event) => setDepositAmount(sanitizeAmountInput(event.target.value))}
+                    onBlur={(event) => {
+                      const formatted = formatAmountOnBlur(event.target.value, "USDC");
+                      if (formatted && formatted !== event.target.value) {
+                        setDepositAmount(formatted);
+                      }
+                    }}
                     aria-invalid={depositPrecisionError ? true : undefined}
                     className={`w-full rounded-xl border bg-zinc-50 px-3 py-2 text-sm outline-none focus:border-indigo-500 dark:border-zinc-800 dark:bg-zinc-900 ${
                       depositPrecisionError ? "border-red-500" : "border-zinc-200"
@@ -327,7 +337,9 @@ export function LendPageClient() {
                         : "text-zinc-500 dark:text-zinc-400"
                     }`}
                   >
-                    {depositPrecisionError ?? depositHelper ?? "Up to 7 decimal places supported."}
+                    {depositPrecisionError ??
+                      depositHelper ??
+                      `Up to ${depositDecimals} decimal places supported.`}
                   </p>
                   <button
                     type="submit"
@@ -358,9 +370,15 @@ export function LendPageClient() {
                     type="text"
                     inputMode="decimal"
                     min="0"
-                    step="0.0000001"
+                    step={Math.pow(10, -withdrawDecimals)}
                     value={withdrawAmount}
                     onChange={(event) => setWithdrawAmount(sanitizeAmountInput(event.target.value))}
+                    onBlur={(event) => {
+                      const formatted = formatAmountOnBlur(event.target.value, "USDC");
+                      if (formatted && formatted !== event.target.value) {
+                        setWithdrawAmount(formatted);
+                      }
+                    }}
                     aria-invalid={withdrawPrecisionError ? true : undefined}
                     className={`w-full rounded-xl border bg-zinc-50 px-3 py-2 text-sm outline-none focus:border-indigo-500 dark:border-zinc-800 dark:bg-zinc-900 ${
                       withdrawPrecisionError ? "border-red-500" : "border-zinc-200"
@@ -375,7 +393,7 @@ export function LendPageClient() {
                   >
                     {withdrawPrecisionError ??
                       withdrawHelper ??
-                      "Up to 7 decimal places supported."}
+                      `Up to ${withdrawDecimals} decimal places supported.`}
                   </p>
                   <button
                     type="submit"
diff --git a/frontend/src/app/[locale]/repay/[loanId]/page.tsx b/frontend/src/app/[locale]/repay/[loanId]/page.tsx
index 8b07b2c8..e53210e1 100644
--- a/frontend/src/app/[locale]/repay/[loanId]/page.tsx
+++ b/frontend/src/app/[locale]/repay/[loanId]/page.tsx
@@ -26,6 +26,8 @@ import {
   buildAmountHelperText,
   getPrecisionError,
   sanitizeAmountInput,
+  formatAmountOnBlur,
+  getAssetDecimals,
 } from "../../../utils/amount";
 
 export default function RepayLoanPage() {
@@ -49,8 +51,9 @@ export default function RepayLoanPage() {
   const [lastError, setLastError] = useState<TransactionErrorDetails | null>(null);
 
   const amountNumber = useMemo(() => Number(amount || "0"), [amount]);
+  const decimals = getAssetDecimals("USDC");
   const precisionError = getPrecisionError(amount, "USDC");
-  const helperText = buildAmountHelperText(amount, "USDC");
+  const helperText = buildAmountHelperText(amount, "USDC", decimals);
 
   const cancelFlow = () => {
     setTrackerState("cancelled");
@@ -211,8 +214,15 @@ export default function RepayLoanPage() {
             id="repayment-amount"
             type="text"
             inputMode="decimal"
+            step={Math.pow(10, -decimals)}
             value={amount}
             onChange={(event) => setAmount(sanitizeAmountInput(event.target.value))}
+            onBlur={(event) => {
+              const formatted = formatAmountOnBlur(event.target.value, "USDC");
+              if (formatted && formatted !== event.target.value) {
+                setAmount(formatted);
+              }
+            }}
             className={`mt-2 w-full rounded-2xl border bg-zinc-50 px-4 py-3 text-zinc-900 outline-none transition focus:border-indigo-500 dark:border-zinc-800 dark:bg-zinc-900 dark:text-zinc-50 ${
               precisionError ? "border-red-500" : "border-zinc-200"
             }`}
@@ -222,7 +232,7 @@ export default function RepayLoanPage() {
               precisionError ? "text-red-600 dark:text-red-400" : "text-zinc-500 dark:text-zinc-400"
             }`}
           >
-            {precisionError ?? helperText ?? "Up to 7 decimal places supported."}
+            {precisionError ?? helperText ?? `Up to ${decimals} decimal places supported.`}
           </p>
         </div>
 
diff --git a/frontend/src/app/components/borrower/LoanRepaymentForm.tsx b/frontend/src/app/components/borrower/LoanRepaymentForm.tsx
index f9f49af0..c6404aef 100644
--- a/frontend/src/app/components/borrower/LoanRepaymentForm.tsx
+++ b/frontend/src/app/components/borrower/LoanRepaymentForm.tsx
@@ -17,6 +17,8 @@ import {
   getPrecisionError,
   parseAmount,
   sanitizeAmountInput,
+  formatAmountOnBlur,
+  getAssetDecimals,
 } from "../../utils/amount";
 
 interface LoanRepaymentFormProps {
@@ -47,13 +49,20 @@ export function LoanRepaymentForm({ loanId, totalOwed, minPayment = 0 }: LoanRep
     },
   });
   const precisionError = getPrecisionError(amount, "USDC");
-  const helperText = buildAmountHelperText(amount, "USDC");
+  const helperText = buildAmountHelperText(amount, "USDC", getAssetDecimals("USDC"));
 
   const handleAmountChange = (value: string) => {
     setAmount(sanitizeAmountInput(value));
     setError(null);
   };
 
+  const handleAmountBlur = (value: string) => {
+    const formatted = formatAmountOnBlur(value, "USDC");
+    if (formatted && formatted !== value) {
+      setAmount(formatted);
+    }
+  };
+
   const validateAmount = (): boolean => {
     const numAmount = parseAmount(amount);
 
@@ -141,12 +150,16 @@ export function LoanRepaymentForm({ loanId, totalOwed, minPayment = 0 }: LoanRep
               inputMode="decimal"
               label="Repayment Amount"
               placeholder="0.00"
+              step="0.01"
               value={amount}
               onChange={(e) => handleAmountChange(e.target.value)}
+              onBlur={(e) => handleAmountBlur(e.target.value)}
               error={error || precisionError || undefined}
               leftIcon={<DollarSign className="h-4 w-4" />}
               required
-              helperText={helperText ?? "Enter the amount you want to repay in USDC"}
+              helperText={
+                helperText ?? "Enter the amount you want to repay in USDC (max 2 decimals)"
+              }
             />
 
             <Button variant="ghost" size="sm" onClick={handlePayFullAmount} className="w-full">
diff --git a/frontend/src/app/components/loan-wizard/StepAmountAsset.tsx b/frontend/src/app/components/loan-wizard/StepAmountAsset.tsx
index f72bca27..861d55f6 100644
--- a/frontend/src/app/components/loan-wizard/StepAmountAsset.tsx
+++ b/frontend/src/app/components/loan-wizard/StepAmountAsset.tsx
@@ -5,7 +5,13 @@ import { Button } from "../ui/Button";
 import { Input } from "../ui/Input";
 import { Card, CardContent, CardHeader, CardTitle } from "../ui/Card";
 import type { LoanWizardData } from "./LoanApplicationWizard";
-import { buildAmountHelperText, getPrecisionError, sanitizeAmountInput } from "../../utils/amount";
+import {
+  buildAmountHelperText,
+  getPrecisionError,
+  sanitizeAmountInput,
+  formatAmountOnBlur,
+  getAssetDecimals,
+} from "../../utils/amount";
 
 const TERM_OPTIONS = [
   { label: "30 days", days: 30 as const },
@@ -44,8 +50,10 @@ interface StepAmountAssetProps {
 export function StepAmountAsset({ data, onChange, onNext, error, onError }: StepAmountAssetProps) {
   const amountNumber = Number(data.amount || "0");
   const minAmount = 100;
-  const precisionError = getPrecisionError(data.amount, data.asset || "USDC");
-  const helperText = buildAmountHelperText(data.amount, data.asset || "USDC");
+  const asset = data.asset || "USDC";
+  const decimals = getAssetDecimals(asset);
+  const precisionError = getPrecisionError(data.amount, asset);
+  const helperText = buildAmountHelperText(data.amount, asset, decimals);
 
   const validate = (): boolean => {
     if (!data.amount || Number.isNaN(amountNumber) || amountNumber <= 0) {
@@ -120,16 +128,23 @@ export function StepAmountAsset({ data, onChange, onNext, error, onError }: Step
 
             {/* Amount */}
             <Input
-              label={`Amount (${data.asset})`}
+              label={`Amount (${asset})`}
               type="text"
               inputMode="decimal"
               min={minAmount}
               max={data.maxAmount || undefined}
+              step={Math.pow(10, -decimals)}
               value={data.amount}
               onChange={(e) => {
                 onChange({ amount: sanitizeAmountInput(e.target.value) });
                 onError(null);
               }}
+              onBlur={(e) => {
+                const formatted = formatAmountOnBlur(e.target.value, asset);
+                if (formatted && formatted !== e.target.value) {
+                  onChange({ amount: formatted });
+                }
+              }}
               placeholder="1000"
               required
               helperText={
@@ -137,7 +152,7 @@ export function StepAmountAsset({ data, onChange, onNext, error, onError }: Step
                 helperText ||
                 (data.maxAmount === 0
                   ? "Not eligible"
-                  : `Eligible range: ${formatMoney(minAmount)} – ${formatMoney(data.maxAmount)}`)
+                  : `Eligible range: ${formatMoney(minAmount)} – ${formatMoney(data.maxAmount)} • Max ${decimals} decimal places`)
               }
               error={precisionError || undefined}
             />
diff --git a/frontend/src/app/components/remittance/RemittanceForm.tsx b/frontend/src/app/components/remittance/RemittanceForm.tsx
index 6dcd2871..095b6b5f 100644
--- a/frontend/src/app/components/remittance/RemittanceForm.tsx
+++ b/frontend/src/app/components/remittance/RemittanceForm.tsx
@@ -16,6 +16,8 @@ import {
   getPrecisionError,
   parseAmount,
   sanitizeAmountInput,
+  formatAmountOnBlur,
+  getAssetDecimals,
 } from "../../utils/amount";
 
 interface RemittanceFormProps {
@@ -31,8 +33,9 @@ export function RemittanceForm({ onSuccess }: RemittanceFormProps) {
 
   const txPreview = useTransactionPreview();
   const mutation = useCreateRemittance();
+  const decimals = getAssetDecimals(token);
   const precisionError = getPrecisionError(amount, token);
-  const helperText = buildAmountHelperText(amount, token);
+  const helperText = buildAmountHelperText(amount, token, decimals);
 
   const validateForm = (): boolean => {
     const newErrors: Record<string, string> = {};
@@ -77,6 +80,13 @@ export function RemittanceForm({ onSuccess }: RemittanceFormProps) {
     }
   };
 
+  const handleAmountBlur = (value: string) => {
+    const formatted = formatAmountOnBlur(value, token);
+    if (formatted && formatted !== value) {
+      setAmount(formatted);
+    }
+  };
+
   const handleMemoChange = (value: string) => {
     setMemo(value);
     if (errors.memo) {
@@ -190,14 +200,15 @@ export function RemittanceForm({ onSuccess }: RemittanceFormProps) {
               type="text"
               inputMode="decimal"
               placeholder="0.00"
+              step={Math.pow(10, -decimals)}
               value={amount}
               onChange={(e) => handleAmountChange(e.target.value)}
+              onBlur={(e) => handleAmountBlur(e.target.value)}
               disabled={mutation.isPending}
               required
               min="0"
-              step="0.0000001"
               error={errors.amount || undefined}
-              helperText={helperText ?? "Up to 7 decimal places supported."}
+              helperText={helperText ?? `Up to ${decimals} decimal places supported.`}
               className={errors.amount ? "border-red-600" : ""}
             />
 
diff --git a/frontend/src/app/utils/amount.ts b/frontend/src/app/utils/amount.ts
index bdaeecf3..1ac125ea 100644
--- a/frontend/src/app/utils/amount.ts
+++ b/frontend/src/app/utils/amount.ts
@@ -1,6 +1,18 @@
 export const STROOP_DECIMALS = 7;
 export const STROOP_SCALE = 10 ** STROOP_DECIMALS;
 
+// Asset-specific decimal precision
+export const ASSET_DECIMALS: Record<string, number> = {
+  XLM: 7,
+  USDC: 2,
+  EURC: 2,
+  PHP: 2,
+};
+
+export function getAssetDecimals(asset: string): number {
+  return ASSET_DECIMALS[asset] ?? STROOP_DECIMALS;
+}
+
 export function sanitizeAmountInput(value: string): string {
   let sanitized = value.replace(/[^\d.]/g, "");
   const firstDotIndex = sanitized.indexOf(".");
@@ -74,14 +86,20 @@ export function buildAmountHelperText(
   return `Formatted: ${formatted} ${asset} • Stroops: ${stroops.toString()}`;
 }
 
-export function getPrecisionError(
-  value: string,
-  asset = "XLM",
-  decimals = STROOP_DECIMALS,
-): string | null {
-  if (!hasInvalidPrecision(value, decimals)) {
+export function getPrecisionError(value: string, asset = "XLM", decimals?: number): string | null {
+  const assetDecimals = decimals ?? getAssetDecimals(asset);
+  if (!hasInvalidPrecision(value, assetDecimals)) {
     return null;
   }
 
-  return `${asset} supports at most ${decimals} decimal places.`;
+  return `${asset} supports at most ${assetDecimals} decimal places.`;
+}
+
+export function formatAmountOnBlur(value: string, asset = "XLM"): string {
+  const decimals = getAssetDecimals(asset);
+  const parsed = parseAmount(value);
+  if (!value || Number.isNaN(parsed)) {
+    return "";
+  }
+  return parsed.toFixed(decimals);
 }