PREPAYMENT COMMISSION Clause Samples
A Prepayment Commission clause defines the fee or penalty a borrower must pay if they repay a loan, or a portion of it, before the scheduled maturity date. Typically, this commission is calculated as a percentage of the prepaid amount and is intended to compensate the lender for lost interest or administrative costs resulting from early repayment. The core function of this clause is to discourage premature loan repayment, thereby protecting the lender’s expected return and ensuring financial predictability.
PREPAYMENT COMMISSION. In the event of a prepayment made by a Borrower pursuant to Clause 6.1, that Borrower shall pay to the relevant Bank or Banks a prepayment commission equal to the amount by which (i) the present value on the date of prepayment (the "PREPAYMENT DATE") of the unpaid accrued interest due on such Bank's Outstandings for the period from and including the Prepayment Date up to and excluding the Repayment Date(s) of such Outstandings exceeds (ii) the present value on the Prepayment Date of the reinvestment interest that the Bank or Banks is/are able to obtain on an amount equal to such Outstandings for the period from, and including, the Prepayment Date to, and excluding, the Repayment Date(s) of such Outstandings. In this Clause 6.2, "REINVESTMENT INTEREST" means interest calculated in accordance with EURIBOR (or LIBOR in respect of Outstandings denominated in Optional Currencies) quoted two Business Days before the Prepayment Date, for the period from and including the Prepayment Date up to and excluding the Repayment Date(s) of such Outstandings. The discount rate applicable to the calculation of the present value of the interest referred to in (i) and (ii) will be EURIBOR (or LIBOR in respect of Outstandings denominated in Optional Currencies) applicable to the remaining period. If not available, the discount rate will be the rate offered to the Bank or Banks by the relevant Reference Banks
PREPAYMENT COMMISSION. The Debtor may prepay the Credit in full or in part at any time. However, if the Debtor makes a total or partial prepayment of the Credit during the first 60 months from the first disbursement of the Credit, the Debtor must pay the Creditor a commission of 1.00% calculated on the prepaid amount. This applies when the payment comes from financing provided by another financial institution or third parties and does not apply when the prepayment is made with the Debtor’s own funds. Any prepayment must be made on an interest payment date, along with the interest accrued up to the date of such payment.