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Acceleration Clause

Definition of "Acceleration clause"

A clause inserted in a mortgage, note, bond, deed of trust, or other credit vehicle that allows the lender to request monies due. Usually, such a clause becomes operational when there has been a default in payments of interest or principal, or both. Thereafter, the entire principal sum in called in and becomes due and payable, this would precipitate a foreclosure in the case of real estate, or bankruptcy action if the monies were not paid at the time of the call.

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