Prepayment Clause
A prepayment clause sets the rules, limits, or penalties that apply when a borrower repays debt before maturity.
Prepayment Clauses and Penalties terms for origination, underwriting, administration, refinancing, bridge financing, leases, authorizations, and servicing risk.
Prepayment Clauses and Penalties terms explain loan origination, underwriting, servicing, administration, refinancing, bridge and gap financing, leases, authorizations, and legal-risk controls.
Use this branch when loan administration, servicing transfer, authorization, refinancing, lease financing, bridge funding, or borrower documentation changes risk or cash-flow timing.
| Term | Use it for |
|---|---|
| Prepayment Clause | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
| Prepayment Penalty | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
| Prepayment Privilege | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
| Prepayment Risk | Origination, underwriting, servicing, administration, refinancing, bridge, gap, lease, authorization, borrower, or legal-risk term. |
Check the origination file, underwriting approval, servicing record, payment history, escrow or reserve record, refinancing terms, lease agreement, authorization record, transfer notice, and applicable legal constraints.
Servicing, refinancing, and lease-financing terms depend on contracts and law; this page is educational, not legal or credit advice.
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A prepayment clause sets the rules, limits, or penalties that apply when a borrower repays debt before maturity.
Fee some lenders charge when a borrower pays off or refinances a loan early and cuts off expected interest income.
Prepayment privilege refers to the borrower's right to repay a portion or the entirety of their loan before its scheduled maturity date without incurring penalties.
Prepayment risk is the risk that borrowers repay debt earlier than expected, reducing interest income or reinvestment yield.