commitment fee


commitment fee
England, Wales
commitment fee, Also known as commitment commission. A fee payable by the borrower to the lender under a loan agreement calculated by reference to the amount of the undrawn and uncancelled loan during the availability period. In a syndicated loan, it will be payable to each of the lenders via the agent.
The fee is designed to compensate the lender for capital adequacy requirements associated with lending.
Typically, the fee is calculated at a rate equal to roughly half the margin and is paid monthly or quarterly in arrears.
+ commitment fee
USA
Fee paid to lenders by borrowers for money that will be borrowed in the future on a specified date. In exchange for the fee, the lender commits to extending credit on the future date. A commitment fee is distinguished from interest.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.


commitment fee
Compensation paid to a lender by a borrower for the lender's promise to give a mortgage at some future time.

Dictionary from West's Encyclopedia of American Law. 2005.


commitment fee
Compensation paid to a lender by a borrower for the lender's promise to give a mortgage at some future time.

Short Dictionary of (mostly American) Legal Terms and Abbreviations.

Look at other dictionaries:

  • Commitment fee — A fee paid to a commercial bank in return for its legal commitment to lend funds that have not yet been advanced. The New York Times Financial Glossary * * * commitment fee commitment fee ➔ fee * * *    A fee paid by a borrower for a lender s… …   Financial and business terms

  • Commitment Fee — A fee lenders charge their borrowers for unused credit or credit that has been promised at a specified future date. A commitment fee is different from interest; although, the two are often confused. A lender charges a borrower a commitment fee to …   Investment dictionary

  • commitment fee — fee paid to receive an extension of credit …   English contemporary dictionary

  • commitment fee — An amount charged by a bank to keep open a line of credit or to continue to make unused loan facilities available to a potential borrower. See firm commitment …   Big dictionary of business and management

  • commitment fee — Amount paid to lender by borrower for loan commitment in addition to interest. Such are common in real estate transactions …   Black's law dictionary

  • commitment fee — Amount paid to lender by borrower for loan commitment in addition to interest. Such are common in real estate transactions …   Black's law dictionary

  • commitment fee — A fee charged by a bank to keep open a line of credit or to continue to make available unused loan facilities. Usually the annual charge is made by the lender on the daily undrawn balance of the facility and is often expressed in basis points …   Accounting dictionary

  • commitment fee — /kə mɪtmənt fi:/ noun a fee paid to a bank which has arranged a line of credit which has not been fully used …   Dictionary of banking and finance

  • commitment commission — England, Wales commitment fee, Also known as commitment commission. A fee payable by the borrower to the lender under a loan agreement calculated by reference to the amount of the undrawn and uncancelled loan during the availability period. In a… …   Law dictionary

  • commitment — n 1: an act of committing: as a: placement in or assignment to a prison or mental hospital petition for commitment compare incompetent, interdiction ◇ Commitment to a mental health facility is called …   Law dictionary