Finance Terminology

Car Loan Acceleration clause

Acceleration clause is a provision given in a contract that gives detailed information on how a car loan may be required to be repaid early, if the lender finds some default on the part of the borrower. A lender can demand payment of the total outstanding balance under some specific causes like failure to make payments, bankruptcy or nonpayment of taxes on mortgaged property amongst others. Sometimes this clause becomes applicable when the borrower might not follow the specific rules described on other clauses of the contract.