prepayment

prepayment
USA
In the case of a loan, it is a whole or partial repayment of the loan before the maturity date set out in the loan agreement. Loan agreements typically include optional prepayment provisions (where the borrower may voluntarily make a loan prepayment) and mandatory prepayment provisions (where the borrower is required to make a loan prepayment in a certain amount on the occurrence of specified events, for example the borrower may be required to prepay the loans with a specified percentage of its excess cash flow).
For more information on prepayments, see Standard Clauses, Loan Agreement: Prepayment and Commitment Reduction Provisions (www.practicallaw.com/2-384-1535).

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

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