prepayment penalty law and Legal Definition Prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. It is a fee that a lender may assess if a borrower repays a loan before the scheduled maturity.
Contents Find 12 meanings Word prepayment penalty mortgage contract stating mortgage risks wrap Represent tremendous risk Carefully drafted. read What does PREPAYMENT PENALTY mean? Here you find 12 meanings of the word prepayment penalty. You can also add a definition of Most lenders allow you to prepay the outstanding balance of a loan at any.
Prepayment Penalty Law and legal definition prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. It is a fee that a lender may assess if a borrower repays a loan before the scheduled maturity.
prepayment penalty: A penalty sometimes charged to a borrower who makes a prepayment.
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Here you find 12 meanings of the word prepayment penalty. You can also add a definition of Most lenders allow you to prepay the outstanding balance of a loan at any time without a fee, but some lenders charge a prepayment penalty, often.
Prepayment Penalty. By Investopedia Staff. A prepayment penalty is a clause in a mortgage contract stating that a penalty will be assessed if the mortgage is paid down or paid off within a certain time period. The penalty is based on a percentage of the remaining mortgage balance or a certain number of months’ worth of interest.
Prepayment penalties are fees charged to borrowers for paying back their loans early. Typically, they don’t apply to individual payments-they are only charged when a borrower pays off a loan in its entirety. 1 These types of fees are occasionally found in personal loans , but they more frequently occur in mortgage contracts.
Prepayment Penalty Definition – A prepayment penalty is a mortgage provision that states that a penalty, or fee, will be assessed to a borrower if an outstanding liability is paid off before a certain time period. lenders typically calculate these fees as a percentage of the outstanding loan balance, the cost of lost interest payments, or as a flat fee.