Prepayment Penalties: State Law Comparison Tool Report

Summary

This practice note contains a report generated by the Practical Guidance State Law Comparison Tool showing a survey of state law requirements relating to prepayment penalties used in real estate financing transactions. Lenders sometimes include fees or penalties in commercial real estate loan agreements for the prepayment of such loans designed to compensate the lenders for lost interest due to the loan paying off early. Some states have prohibitions or restrictions on prepayment penalties being included in real estate loans. The state law regarding prepayment penalties on loans may be statutory or common law.