Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia, Wikipedia.
The clause in a promissory note or lease that allows immediate demand,upon default,for all sums due over the entire term.
A contractual provision that gives the lender the right to demand repayment of the entire loan balance in the event that the borrower violates one or more clauses in the note.
Such clauses may include sale of the property, failure to make timely payments, or provision of false information.
I have never seen a note that did not have such a clause. Borrowers need not concern themselves with it except where the lender has discretion to exercise it without conditions. This would be referred to as a “demand feature,” and it would be flagged on the Truth in Lending Disclosure Statement. If that statement shows “This loan has a Demand Feature…,” the note should be read with care. See Demand Clause.