Prepayment Rights: Difference between revisions
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{{REVIEWEDPLS | reviewer = [[Alison Ward]]|date= August 2018}}{{Consumer and Debt Law TOC|expanded = | {{REVIEWEDPLS | reviewer = [[Alison Ward]]|date= August 2018}}{{Consumer and Debt Law TOC|expanded = mortgages}} | ||
'''Prepayment rights''' enable a borrower to pay off or pay down a debt earlier than when periodic payments are due. | '''Prepayment rights''' enable a borrower to pay off or pay down a debt earlier than when periodic payments are due. | ||
== Client problems == | == Client problems == | ||
* | * Client wants to pay off a mortgage and wants to know if they can do this and how much has to be paid.
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* Client wants to pay off a consumer loan or a credit card account and wants to know if they can do this and how much has to be paid.
| * Client wants to pay off a consumer loan or a credit card account and wants to know if they can do this and how much has to be paid.
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== Summary of the law== | == Summary of the law== | ||
[[File:Consumer_Law_and_Debt_-_Prepayment_Rights.jpg|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]] | |||
In common law, parties can set out a variety of terms in a credit agreement. One important term is whether the borrower is allowed to pay off or pay down the obligation earlier than when the periodic payments (for example, the monthly payments) are due. This is called the right of prepayment. | In common law, parties can set out a variety of terms in a credit agreement. One important term is whether the borrower is allowed to pay off or pay down the obligation earlier than when the periodic payments (for example, the monthly payments) are due. This is called the right of prepayment. | ||
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== Related topics and materials== | == Related topics and materials== | ||
See other sections on mortgages and secured loans: | See other sections on mortgages and secured loans: | ||
* Mortgages and | * [[Mortgages and Foreclosure|Mortgages and Foreclosures]] | ||
* Security | * [[Security Agreements]]
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See related topics: | See related topics: | ||
* Contracts Overview
| * [[Contracts Overview]]
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* Interest and the Cost of Borrowing | * [[Interest and the Cost of Borrowing Money]]
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{{Consumer and Debt Law Navbox|type = debt}} | {{Consumer and Debt Law Navbox|type = debt}} |