FinanceQuestion 71 of 120
A loan feature that lets the lender declare the entire remaining balance due upon borrower default is a(n):
a.Prepayment penalty
b.Subordination clause
c.Acceleration clause
d.Defeasance clause
Explanation
An acceleration clause allows the lender to demand the full unpaid balance immediately if the borrower defaults, which is a prerequisite to foreclosure. A defeasance clause, by contrast, cancels the lien once the debt is fully paid.
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