prepayment

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Related to Pre-Payment: Prepayment penalty

Prepayment

1. The payment of a debt in full before it is due. Prepayment is good for the borrower because it relieves him/her of the debt, but it deprives the lender of interest he/she would have received otherwise. As a result, some lenders attach prepayment penalties to loans to disincentivize prepayments. Prepayment can me a major risk to collateralized mortgage obligations as coupon payments are based on interest received from the underlying mortgages. Less commonly, this is called anticipation. See also: Prepayment risk.

2. Payment in advance for a good or service not yet received.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

prepayment

A payment made before the day it is due. For example, sending a check on the transaction date for securities bought with regular-way delivery will almost surely result in prepayment.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

prepayment

or

payment in advance

an expense which is paid in one trading period but which is properly chargeable against the revenues or profits of future trading periods. For example, if a company preparing accounts for the year to 31 December pays its annual rent on 1 April, then only three quarters of that rent relates to the current trading period, the remaining quarter being a prepayment for use of the building from 1 January to 31 March in the next trading period. Prepayments are counted as part of the company's assets at the end of the trading period and are usually included as part of DEBTORS in the firm's BALANCE SHEET. See ACCRUAL.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

Prepayment

A payment made by the borrower over and above the scheduled mortgage payment.

If the additional payment pays off the entire balance it is a “prepayment in full”; otherwise, it is a “partial prepayment.” See Partial Prepayments.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The pre-payment cap, which has been in place since April 2017, will also be higher than the default cap from October after the Competition and Markets Authority last month decided to bring the method for calculating it in line with the default cap.
In addition to the Pre-payment Facility, Venturex has agreed to life-of-mine for the first 11 years, then 50% of annual concentrates (LOM) off-take terms with Trafigura for the production of both copper and zinc concentrates from the Sulphur Springs Project.
Ready Capital closed the $6.0 million non-recourse floating rate interest-only loan that features a 24-month term with one extension option, flexible pre-payment, and is inclusive of a facility to provide for capital expenditures, leasing costs, and interest and carry reserves.
The QuoteWerks integration is available to all partners, and will allow acceptance of pre-payments via QuoteWerks Quote Valet.
As a result of the pre-payment, a pledge of 11.5 mil GL shares made with GLH has been released.
"Ofgem's decision to pass on lower electricity costs to consumers by reducing the level of safeguard tariff for pre-payment meter customers is right.
The change, which comes into force on October 1, will see the average annual dual fuel bill for pre-payment customers cut from PS1,067 to PS1,048, Ofgem said.
The council's ruling cabinet says a "priority will be to help residents to move away from pre-payment meters".
If you've got a pre-payment meter, you can change your tariff, but you'll still be stuck with pay-asyou-go bills.
If you have a pre-payment meter, your supplier should inform you about how you can claim the rebate but it is likely to be one of two methods: You may be sent a |voucher to be redeemed for an electricity credit when you next top up at your usual retail outlet, or You may receive the | rebate automatically as your supplier will have sent an electronic credit which you will pick up when you next top up.