prepayment penalty

Definition of "prepayment penalty"
  1. A charge levied on a borrower who fulfills a loan, typically a mortgage, earlier than the scheduled end date
How to use "prepayment penalty" in a sentence
  1. The couple was surprised by the prepayment penalty when they settled their mortgage ahead of time.
  2. To avoid the prepayment penalty, the businessman decided to schedule his loan payments as per the original plan.
  3. The keen investment Ian made could not compensate the prepayment penalty of his mortgage.

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