Business Term to Know: Acceleration Clause

An acceleration clause is a lender’s tool that enables the lender to declare that all of the payments that are owed are immediately due and must be paid on the happening of a certain event, such as the sale of property, or if certain loan conditions are not met like delinquency in payments.

The acceleration clause is most commonly initiated with consumer credit contracts in regards to large purchases like the purchase of a house or a vehicle.