If a Loan Has a Prepayment Penalty, There Will Be

question 20

Multiple Choice

If a loan has a prepayment penalty, there will be an additional cost to repay the loan early:

• A) if the loan is repaid before the first payment is due.
• B) if the lender wants to recover part of the full interest that would have been earned.
• C) if the borrower has defaulted on any monthly payment.
• D) if the loan is not repaid before the loan maturity date.
• E) if the loan is prepaid 3 months before the loan maturity.