What clause allows a lender to declare the entire loan balance due immediately in case of borrower default?

The acceleration clause is a provision in a loan agreement that permits the lender to demand full repayment of the outstanding loan balance in the event of a borrower default. This clause is crucial for lenders as it provides them with a mechanism to protect their investment and mitigate potential losses that arise from a borrower's inability to fulfill their repayment obligations.

In a typical scenario, if the borrower fails to make a scheduled payment or breaches any other terms of the loan agreement, the lender can invoke the acceleration clause. This means they can declare the total amount of the loan due and payable immediately, rather than waiting for the original repayment schedule to run its course. This provision is essential for maintaining the lender's rights and ensuring they can take prompt action if necessary.

The other clauses do serve different purposes. An alienation clause addresses the transfer of the property and may require the borrower to pay the remaining balance if they sell the property before the loan is fully paid. The defeasance clause is often found in mortgage agreements and allows the borrower to satisfy their loan obligation upon the payment of a specified amount or completion of certain conditions. A repayment clause typically outlines the terms and schedule for making payments but does not grant the lender the right to accelerate the loan upon default. Thus, the acceleration