If a loan has a prepayment penalty,there will be:
A)no additional cost to repay the loan early.
B)an additional cost to repay the loan early.
C)an additional cost to repay the loan if the borrower has defaulted any monthly payment.
D)an additional cost to repay the loan if the loan is not repaid before the loan maturity.
E)no additional cost to repay the loan early only if the loan is prepaid 3 months before the loan maturity.

Question

Quizplus · Accepted Answer

A prepayment penalty is a fee charged by lenders if the borrower repays the loan before its scheduled due date. This fee can be a percentage of the outstanding loan amount or a flat fee. Therefore, there will be an additional cost to repay the loan early if it has a prepayment penalty.

If a Loan Has a Prepayment Penalty,there Will Be