Definitions for "PREPAYMENT CLAUSE"
The clause in a mortgage or note stating the penalty, if any, for payment before it actually becomes due.
A clause within an agreement permitting payment of a debt prior to a due date; may be with or without a penalty.
A clause in a mortgage enabling the borrower to pay off the mortgage balance before the end of the mortgage term. This privilege sometimes involves a prepayment penalty.
A term in a mortgage that establishes the rules regarding extra payments toward principal.