Acceleration
Loan acceleration makes the outstanding debt immediately due after a specified default or other contractual trigger.
Compare a lender's right to accelerate debt, its agreement to forbear, and protection against voluntary early repayment.
Acceleration, forbearance, and yield maintenance change a loan’s expected timing for different reasons. Acceleration is an enforcement remedy, forbearance postpones payment or enforcement, and yield maintenance compensates a lender when covered debt is repaid early.
| Term | Typical trigger | What changes | Core evidence |
|---|---|---|---|
| Acceleration | Uncured default or another stated event | The outstanding debt becomes immediately due | Default clause, notices, cure record, acceleration demand |
| Forbearance | Temporary hardship or negotiated workout | Payments or enforcement are reduced, paused, or delayed | Written agreement, payment history, exit terms |
| Yield Maintenance | Voluntary payoff during a protected period | Early repayment includes a contractual yield-protection amount | Prepayment clause, reference yield, payoff calculation |
After a default, a lender may accelerate, waive a breach, reserve its rights, or enter forbearance while a viable workout is evaluated. The choice affects liquidity, collateral control, cross-default exposure, and recovery timing.
Yield maintenance usually concerns a performing borrower that wants to sell, refinance, or deleverage before maturity. It is closer to a prepayment penalty than to a default remedy.
Verify the contractual trigger, notice and cure requirements, the amount affected, who can authorize the action, and whether the provision is optional or automatic. For a workout, assess whether the exit plan is feasible. For yield maintenance, independently check the balance, remaining payments, reference rate, calculation date, and contractual floor.
Contract enforceability and servicing requirements vary by product and jurisdiction. This section explains financial mechanics and does not provide legal or workout advice.
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Loan acceleration makes the outstanding debt immediately due after a specified default or other contractual trigger.
Forbearance is a temporary agreement to reduce or pause required loan payments or delay enforcement without erasing the debt.
Yield maintenance is a prepayment-premium formula intended to compensate a lender when fixed-rate debt is repaid early.