prepayment penalty
Loan acceleration charge
A prepayment penalty is a fee charged by a lender when a borrower pays off a loan before its scheduled term ends.
Lenders impose these penalties to recover interest income they lose when loans are retired early.
Common with mortgages and auto loans: Check whether your mortgage has a prepayment penalty before refinancing.
- refinancingReplacing a loan
- early payoffDebt settled before term
- feePayment for service
- mortgageSecured home loan
- loanBorrowed money repaid later
contract · amortization · balloon payment · waiver · enforceability · state regulations · lock-in · golden handcuffs · escape clause · interest rate · rate lock · usury laws · grace period · principal · federal oversight · closing costs · foreclosure · defeasance
borrower incentive/disincentive structure
prepayment penaltyloan forgiveness
Cancellation of owed amounts