Home
E-Mail
Latest

Prepayment Penalty Financial Glossary

What is it? A fee that must be paid to the lender if the borrower prepays a loan within a defined time period. Many consumer loans, especially residential mortgage loans, do not have prepayment penalties.

Finance Term Definition Added By: Katie

The Prepayment Penalty definition has been viewed 1617 Time(s)!




Send To Friends!

If you'd like to send the Prepayment Penalty definition to yourself or to your friends/colleagues, just enter the e-mail addresses in the boxes below -





We hope you now understand the meaning of Prepayment Penalty. If you need any more information on this term, please don't hesitate to contact us.

Other Similar Finance Terms:

Financial Term Encumbrance is A claim against a property by another party which usually affects the ability to transfer ownership of the property.

Financial Term Repayment Mortgage is Also called an Annuity mortgage or Capital and Interest mortgage. With this type of mortgage the monthly repayment includes an element of the capital sum borrowed in addition to the interest charged. In the early years of the mortgage the majority of the monthly repayment consists of interest with only a small part repaying the capital. However, as the debt gradually reduces the element of capital increases and the interest element reduces, so although the monthly repayment stays the same (assuming interest rate remain unaltered) the debt starts to reduce more quickly as the term of the mortgage progresses. On a 25 year term mortgage it would not be unusual to still owe over 50% of the original debt after the first 15 years. Providing the correct monthly repayments are made on their due dates this mortgage will guarantee to repay the total mortgage debt at the end of the mortgage term.

Financial Term Consolidated Omnibus Budget Reconciliation Act of 1985COBRA is If your company is covered by a COBRA plan and you leave your job for whatever reason and were an active participant in the companys health plan prior to your departure date, you have the right, if you wish, to continue the health insurance coverage you and your family received, for at least 18 months. You will have to pay for this coverage out of your own pocket, but it cannot be more than 102 percent of the normal cost of coverage. COBRA is meant to protect you while you look for another policy.

Financial Term Variable Interest Rate is Variable interest rates change over time. They are calculated by taking the published prime rate (which varies) and adding a fixed percentage or margin on top. For example, a variable rate may be the prime rate plus 3.9 percent.

Financial Term SAYE is Save as you earn