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Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

Acceleration Clause

An acceleration clause lets the lender declare the entire loan balance immediately due and payable when the borrower defaults on a material term, such as missing payments or violating a due-on-sale restriction.

Exam context

Read whether the note contains an acceleration clause and whether the described event is a default under that note. Partial payment acceptance after default sometimes waives acceleration unless the lender reserves rights in writing.

Typical triggers

Common triggers include payment default after any applicable grace period, unauthorized transfer of the property, failure to maintain hazard insurance, or breach of other loan covenants. The clause does not automatically foreclose; it accelerates the debt so the lender can demand full payoff or begin foreclosure if the borrower cannot cure.

Acceleration vs installment default only

Without an acceleration clause, the lender might recover only past-due installments. With acceleration, the whole unpaid principal plus accrued interest can become due at once. Exam questions often ask whether the lender may demand the full balance after a single late payment when the note includes a standard acceleration provision.

Examples

  • Missed payments

    A borrower misses three consecutive monthly payments. The lender sends notice that the full remaining balance is due under the acceleration clause after the cure period expires.

  • Due-on-sale trigger

    An owner sells subject to an existing loan without lender approval. A due-on-sale clause paired with acceleration lets the lender call the entire loan balance when the transfer occurs.

Keep studying

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