Explore commonly used personal finance terms.
An acceleration clause is a contract provision that allows a lender to demand immediate repayment of the outstanding loan balance if certain conditions, such as a missed payment or breach of agreement, are met. Common in mortgages and installment loans, this clause protects lenders by providing recourse in case of default. For borrowers, acceleration clauses emphasize the importance of meeting contract terms, as triggering the clause can lead to serious financial consequences, including foreclosure in mortgage loans.
