prepayment

USAGE SUMMARY

The phrase "prepayment" is correct and usable in written English.
It can be used in contexts related to finance or transactions where payment is made in advance of receiving goods or services. Example: "To secure your reservation, a prepayment of 50% is required."

✓ Grammatically correct

News & Media

Encyclopedias

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

He dismissed the companies' claims that they do not disconnect customers by pointing out that those who fall into debt are moved on to prepayment meters which in effect force them to "self-disconnect".

The Guardian - Business

Forecasting prepayment risk in America, for example, is complicated and requires lots of information about demographics and credit factors, along with plenty of market data.

The Economist

Besides increasing liquidity, standardisation also makes it easier for investors who buy the bonds to forecast and deal with prepayment risk.

The Economist

The bonds are callable, to reflect the prepayment risk of the underlying mortgages.In this section The global gusher The three Scrooges The Rip van Winkle of risk Sweet success A Danish model in Aztec dress Shifting sands ReprintsDenmark's approach allows mortgage-backed securities to be standardised into large pools, which makes them more liquid and attracts investors.

The Economist

In its settlement with the state attorneys-general, Household has promised to cap loan-origination fees and front-end payments at 5%, to restrict prepayment penalty periods to two years and to ensure that all real-estate-secured loans provide a net tangible benefit to the borrower.

The Economist

It has also waived prepayment penalties for existing product-holders and is marshalling its employees to help move these customers on to conventional mortgages.

The Economist

That reaction probably had less to do with concerns about lower currency reserves than with the uncertainties Mr Kirchner has now introduced into Argentine economic policy by casting off Mr Lavagna and the IMF in short order.In the new Argentina, the president's word is law: he chose to enact the prepayment by presidential decree, riding roughshod over the central bank's legal independence.

The Economist

THE idea of collecting cash online through a mix of patronage and prepayment sprouted informally a few years ago.

The Economist

Steep prepayment penalties discouraged refinancing from occurring until after the higher interest rate had already kicked in.The Federal Deposit Insurance Corporation FDICC), which Ms Bair ran, did a study showing that the "teaser" rates were often slightly higher than the interest rates offered to other subprime borrowers with similar credit scores for thirty-year fixed-rate loans.

The Economist

If rates rise after they buy a home, they are protected by the fixed interest rate; if rates fall, they can take out a new mortgage at a lower rate and prepay the old one (see chart).The prepayment option, like bond issuers' options to call some bonds before they mature, saddles the lender with more risk.

The Economist

As William May of Fitch Ratings, another rating agency, points out, companies hoping for a prepayment option on any new borrowing in order to refinance their loans at a cheaper rate, will almost certainly have to pay their lenders a premium for doing so.

The Economist

Expert writing Tips

Best practice

When discussing financial agreements, clearly specify the "prepayment" terms, including the amount, due date, and any associated benefits or penalties.

Common error

Avoid using "prepayment" when you mean reimbursement. "Prepayment" is paying beforehand, while reimbursement is being paid back for expenses already incurred.

Linguistic Context

The word "prepayment" functions primarily as a noun, referring to the act of paying in advance or the amount paid in advance. Examples from Ludwig show it used in contexts such as energy bills, mortgages, and loans.

Expression frequency: Very common

Frequent in

News & Media

40%

Encyclopedias

30%

Formal & Business

20%

Less common in

Science

5%

Social Media

3%

Reference

2%

Ludwig's WRAP-UP

In summary, "prepayment" is a noun signifying a payment made in advance. Ludwig AI confirms its grammatical correctness and common usage across various domains. While alternatives like "advance payment" and "upfront payment" exist, understanding the context ensures proper usage. The term is prevalent in news, encyclopedias, and formal business settings, and knowing the distinction between "prepayment" and related terms like "reimbursement" and "deposit" is crucial for clear communication.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

advance payment

Replaces "prepayment" with a more common and straightforward term.

upfront payment

Emphasizes that the payment is made at the beginning.

payment in advance

A slightly more formal and explicit way of saying "prepayment".

early payment

Highlights the timing of the payment relative to its due date.

deposit

Specifically refers to a partial payment made to secure a service or product.

down payment

Refers to an initial payment made when purchasing something on credit.

pre-funding

Suggests allocating funds beforehand for a specific purpose.

payment beforehand

Directly indicates payment before the service or product is received.

initial installment

Implies the first payment of a series.

advance remittance

A more formal term for sending money in advance.

FAQs

How can I use "prepayment" in a sentence?

You can use "prepayment" to describe paying for goods or services in advance, as in: "A 20% "prepayment" is required to secure your booking."

What are some alternatives to saying "prepayment"?

Depending on the context, you can use phrases like "advance payment", "upfront payment", or "payment in advance" instead of "prepayment".

Is there a difference between "prepayment" and "deposit"?

"Prepayment" generally refers to paying the full amount in advance, while a "deposit" is typically a partial payment to secure something.

What does "prepayment penalty" mean?

A "prepayment penalty" is a fee charged by a lender if you pay off a loan (like a mortgage) earlier than agreed. Check your loan terms to see if one applies.