The payoff amount refers to the remaining balance of a loan that a borrower must pay to completely satisfy the debt, including any applicable prepayment penalty.
Money or other costs one will pay for breaking a law or violating part or all of the terms of a contract. Penalties are often imposed for prepaying a loan, failing to complete a contract sale, or breaking a lease; penalties are not tax deductible.
A prepayment clause is a provision in a bond or mortgage that allows the borrower to pay off the loan before its scheduled due date. In some cases, there may be penalties for prepayment, such as the waiver of interest that is not yet due.
A prepayment penalty is a fee paid by a borrower for the privilege of retiring a loan early. It is not a tax-deductible interest expense.
