PREPAYMENT—STEPPED Sample Clauses
The PREPAYMENT—STEPPED clause defines the terms under which a borrower can repay a loan before its scheduled maturity, with prepayment penalties or fees that decrease over time. Typically, this means that if the borrower repays the loan early within the first few years, they will incur a higher fee, but this fee reduces in subsequent years according to a predetermined schedule. This structure incentivizes borrowers to keep the loan for a minimum period while still allowing flexibility for early repayment, and it compensates the lender for the loss of expected interest income if the loan is paid off ahead of schedule.
PREPAYMENT—STEPPED. Borrower acknowledges that any prepayment of this Note will cause Lender to lose its interest rate yield on this Note and will possibly require that Lender reinvest any such prepayment amount in loans of a lesser interest rate yield (including, without limitation, in debt obligations other than first mortgage loans on commercial properties). As a consequence, Borro▇▇▇ ▇▇▇▇es as follows, as an integral part of the consideration for Lende▇’▇ ▇▇king the Loan: