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Prepayment Penalty for DSCR Loans

Last edited: July 25, 2025

What is a Prepayment Penalty?

If you are a rental property investor shopping for a DSCR loan, you have probably come across the concept of a prepayment penalty. A pre payment penalty is a fee charged to the borrower for paying off the loan during a specified period of time.

Why do lenders charge a prepayment penalty?