Prepayment Penalty / Fee

By December 6, 2021No Comments

A fee which requires a payment by the Borrower to the parties financing a project (typically banks) in the event that all or a part of a financing is repaid by the borrower in advance of its scheduled final maturity date. The payment is typically a percentage of the amount repaid. If only a part of the loan is prepaid the amount prepaid will usually be applied in inverse order of maturity.