Pagosa Springs, CO asked in Consumer Law and Real Estate Law for Colorado

Q: a borrower has the right to prepay the principle amount in whole or part of without penalty except with consent of note

Holder,who may require compensation for adverse income tax consequences of such early payments. what is a borrower to say or do if note holder ask the borrower for alot of money ?

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1 Lawyer Answer
Donald C Eby
Donald C Eby
Answered
  • Castle Rock, CO
  • Licensed in Colorado

A: Either the borrower has the right to pre-pay without penalty or he does not. This should be defined in the terms of the Promissory Note. Lender does not have the right to unilaterally change the terms or demand more. If there is no written promissory note - Lender likely does not have the right to prevent early payment or charge a fee for early payment.

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