diff --git a/src/Clearinghouse.sol b/src/Clearinghouse.sol
index 6931054..44e7589 100644
--- a/src/Clearinghouse.sol
+++ b/src/Clearinghouse.sol
@@ -186,14 +186,15 @@ contract Clearinghouse is Policy, RolesConsumer, CoolerCallback {
         if (loan.lender != address(this)) revert NotLender();
 
         uint256 interestNew;
-        if (loan.interestDue == 0) {
+        uint256 interestBase = interestForLoan(loan.principal, loan.request.duration);
+        if (loan.interestDue != interestBase) {
             // If interest has manually been repaid, user only pays for the subsequent extensions.
-            interestNew = interestForLoan(loan.principal, loan.request.duration * (times_ - 1));
+            interestNew = interestBase * (times_ - 1) + loan.interestDue;
             // Receivables need to be updated.
-            interestReceivables += interestForLoan(loan.principal, loan.request.duration);
+            interestReceivables += interestBase - loan.interestDue;
         } else {
             // Otherwise, user pays for all the extensions.
-            interestNew = interestForLoan(loan.principal, loan.request.duration * times_);
+            interestNew = interestBase * times_;
         }
         // Transfer in extension interest from the caller.
         dai.transferFrom(msg.sender, loan.recipient, interestNew);
@@ -267,10 +268,8 @@ contract Clearinghouse is Policy, RolesConsumer, CoolerCallback {
 
         // Reward keeper.
         gohm.transfer(msg.sender, keeperRewards);
-
-        // Unstake and burn the collateral of the defaulted loans.
-        gohm.approve(address(staking), totalCollateral - keeperRewards);
-        MINTR.burnOhm(address(this), staking.unstake(address(this), totalCollateral - keeperRewards, false, false));
+        // Burn the outstanding collateral of defaulted loans.
+        burn();
     }
 
     // --- CALLBACKS -----------------------------------------------------
@@ -315,6 +314,10 @@ contract Clearinghouse is Policy, RolesConsumer, CoolerCallback {
         if (fundTime > block.timestamp) return false;
         fundTime += FUND_CADENCE;
 
+        // Sweep DAI into DSR if necessary.
+        uint256 idle = dai.balanceOf(address(this));
+        if (idle != 0) _sweepIntoDSR(idle);
+
         uint256 daiBalance = sdai.maxWithdraw(address(this));
         uint256 outstandingDebt = TRSRY.reserveDebt(dai, address(this));
         // Rebalance funds on hand with treasury's reserves.
@@ -334,10 +337,6 @@ contract Clearinghouse is Policy, RolesConsumer, CoolerCallback {
             TRSRY.increaseWithdrawApproval(address(this), sdai, sdaiAmount);
             TRSRY.withdrawReserves(address(this), sdai, sdaiAmount);
 
-            // Sweep DAI into DSR if necessary.
-            uint256 idle = dai.balanceOf(address(this));
-            if (idle != 0) _sweepIntoDSR(idle);
-
             // Log the event.
             emit Rebalance(false, fundAmount);
 
@@ -408,10 +407,10 @@ contract Clearinghouse is Policy, RolesConsumer, CoolerCallback {
         emit Defund(address(token_), amount_);
     }
 
-    /// @notice Burn any gOHM defaulted using the Cooler instead of the Clearinghouse.
-    function burn() external {
+    /// @notice Public function to burn gOHM.
+    /// @dev    Can be used to burn any gOHM defaulted using the Cooler instead of the Clearinghouse.
+    function burn() public {
         uint256 gohmBalance = gohm.balanceOf(address(this));
-
         // Unstake and burn gOHM holdings.
         gohm.approve(address(staking), gohmBalance);
         MINTR.burnOhm(address(this), staking.unstake(address(this), gohmBalance, false, false));
diff --git a/src/test/Clearinghouse.t.sol b/src/test/Clearinghouse.t.sol
index 2af48ab..469d6bd 100644
--- a/src/test/Clearinghouse.t.sol
+++ b/src/test/Clearinghouse.t.sol
@@ -325,7 +325,7 @@ contract ClearinghouseTest is Test {
         uint256 initInterest = clearinghouse.interestReceivables();
         uint256 initPrincipal = clearinghouse.principalReceivables();
         // Approve the interest of the extensions
-        uint256 interestOwed = clearinghouse.interestForLoan(initLoan.principal, initLoan.request.duration * times_);
+        uint256 interestOwed = clearinghouse.interestForLoan(initLoan.principal, initLoan.request.duration) * times_;
         dai.approve(address(clearinghouse), interestOwed);
         // Extend loan
         clearinghouse.extendLoan(cooler, loanID, times_);
@@ -346,7 +346,7 @@ contract ClearinghouseTest is Test {
         assertEq(clearinghouse.principalReceivables(), initPrincipal);
     }
 
-    function testFuzz_extendLoan_withPriorRepayment(uint256 loanAmount_, uint256 elapsed_, uint8 times_) public {
+    function testFuzz_extendLoan_withPriorRepayment(uint256 loanAmount_, uint256 repay_, uint256 elapsed_, uint8 times_) public {
         // Loan amount cannot exceed Clearinghouse funding
         loanAmount_ = bound(loanAmount_, 1e10, clearinghouse.FUND_AMOUNT());
         elapsed_ = bound(elapsed_, 0, clearinghouse.DURATION());
@@ -358,18 +358,22 @@ contract ClearinghouseTest is Test {
         // Move forward without defaulting
         _skip(elapsed_);
 
-        vm.startPrank(user);
-        dai.approve(address(cooler), initLoan.interestDue);
+        // Bound repayment
+        repay_ = bound(elapsed_, 1, initLoan.interestDue);
+
         // Repay interest of the first extension manually
-        cooler.repayLoan(loanID, initLoan.interestDue);
+        vm.startPrank(user);
+        dai.approve(address(cooler), repay_);
+        cooler.repayLoan(loanID, repay_);
 
         // Cache DAI balance and interest after repayment
+        Cooler.Loan memory repaidLoan = cooler.getLoan(loanID);
         uint256 initDaiUser = dai.balanceOf(user);
         uint256 initDaiCH = dai.balanceOf(address(clearinghouse));
         uint256 initInterest = clearinghouse.interestReceivables();
         uint256 initPrincipal = clearinghouse.principalReceivables();
         // Approve the interest of the followup extensions
-        uint256 interestOwed = clearinghouse.interestForLoan(initLoan.principal, initLoan.request.duration * (times_ - 1));
+        uint256 interestOwed = clearinghouse.interestForLoan(initLoan.principal, initLoan.request.duration) * (times_ - 1) + repaidLoan.interestDue;
         dai.approve(address(clearinghouse), interestOwed);
 
         // Extend loan
@@ -387,7 +391,7 @@ contract ClearinghouseTest is Test {
         assertEq(extendedLoan.collateral, initLoan.collateral, "collateral");
         assertEq(extendedLoan.expiry, initLoan.expiry + initLoan.request.duration * times_, "expiry");
         // Check: clearinghouse storage
-        assertEq(clearinghouse.interestReceivables(), initInterest + extendedLoan.interestDue);
+        assertEq(clearinghouse.interestReceivables(), initInterest + extendedLoan.interestDue - repaidLoan.interestDue);
         assertEq(clearinghouse.principalReceivables(), initPrincipal);
     }