Business / Real Estate / Prepayment Penalty: The amount set by the creditor as a penalty to the debtor for paying off the debt before it matures, an early-withdrawal charge. The prepayment penalty is charged by the lender to recoup a portion of interest that the lender had planned to earn when the loan was made. It covers the lender for initial costs to set up the loan, to service it and to carry it in the early years of high risk. This punitive device also may represent the loss of income to the lender for the time the mortgage is paid off and the funds remain uncommitted. The reason most lenders are willing to allow prepayment after five years without penalty is that much of the total notes interest has been paid in by that time.
Penalty Adjective Synonyms: punishment, discipline, penance, sentence, forfeit, fine, handicap, price, mulct, amercement, imprisonment, incarceration
Entertainment / Ice Hockey / Penalty Shootout: A method of deciding a winner, in amateur hockey, if the score is still tied after one overtime period. Each team designates five shooters and a goalie, and the teams alternate penalty shots, with a d MORE
Entertainment / Ice Hockey / Penalty Shot: A shot on goal, with only the goaltender defending, awarded for certain infractions. The player taking the shot is given the puck at the center ice spot and must keep the puck moving forward once acro MORE