1. The payment of a debt obligation prior to its due date.
2. The excess payment over a scheduled debt repayment amount.
Investopedia Says:
1. Examples include deferred expenses such as rent and early loan repayments.
2. Mortgage pass-through securities are prone to prepayment risk during a period of falling interest rates, as mortgage payments tend to accelerate.
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Learn the factors to consider when comparing the different programs offered by various lenders. Home-Equity Loans: The Costs
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