An acceleration clause in a loan allows the lender to collect the unpaid balance of a loan if a payment is missed.

Question

Quizplus · Accepted Answer

An acceleration clause gives the lender the right to demand immediate payment of the entire outstanding loan balance if the borrower misses a payment or violates any other terms of the loan agreement. This clause is commonly included in mortgage contracts and other loan agreements to protect the lender's financial interests and reduce the risk of default by the borrower.

An Acceleration Clause in a Loan Allows the Lender to Collect