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Prepayment Penalty
A monetary penalty paid to the lender if the loan is paid off before its maturity or if extra payments are made on the loan.
Sometimes defined as "hard" or "soft".
A hard penalty is an automatic penalty if the loan is paid off early or extra payments are made at any time or for any amount whatsoever.
A soft penalty only lasts for a couple of years and may allow extra payments on the loan if they do not to exceed a certain amount.
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