Under a partial release clause, a lender:

a. accelerates the loan if the security property is sold

b. declares the entire loan balance due in the event of default

c. imposes a penalty when part of the principal is repaid before it is due

d. removes the lien from part of the property when part of the debt has been paid

Question

Business

Rohan Haas

19 February, 23:11

Under a partial release clause, a lender:

a. accelerates the loan if the security property is sold

b. declares the entire loan balance due in the event of default

c. imposes a penalty when part of the principal is repaid before it is due

d. removes the lien from part of the property when part of the debt has been paid

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Whitney Williamson · Answer 1

D. Removes the lien from part of the property when part of the debt has been paid. This clause is used in commercial loans to allow a developer to repay part of the debt to remove the lien on part of the property. It is negotiated for agreed-upon payments to free multiple parcels of property separately to encourage development.