acceleration clause

Definition

A provision that allows a lender to demand payment of the total outstanding balance or demand additional collateral under certain circumstances, such as failure to make payments, bankruptcy, nonpayment of taxes on mortgaged property, or the breaking of loan covenants.

Use acceleration clause in a sentence

I read the acceleration clause and that was fine by me because it meant that I could demand payment under certain circumstances.

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The bank decided that John was too great a risk when he missed several payments on his loan, and they decided to demand immediate repayment of the loan plus interest under the acceleration clause.

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John Smith's bank could invoke the acceleration clause if he tries to sell his home forcing him to pay the full amount of the mortgage so he decided to rent his home out instead.

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acceleration alienation clause