prepayment penalty

prepayment penalty definition - business

prepayment penalty

The charge assessed a borrower for early repayment of a loan. A prepayment penalty makes it less likely a borrower will refinance a loan following a drop in market rates of interest.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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