Repayments and Prepayments; Application Clause Samples

The 'Repayments and Prepayments; Application' clause defines how and when a borrower must repay or may prepay amounts owed under a loan agreement, as well as the order in which such payments are applied to outstanding obligations. It typically outlines the schedule for regular repayments, the conditions under which prepayments can be made (such as voluntary or mandatory prepayments), and specifies whether prepayments reduce principal, interest, or other fees first. This clause ensures clarity and predictability for both parties by establishing a clear framework for handling payments, thereby reducing the risk of disputes over how payments are credited and helping both lender and borrower manage their financial planning.