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Real estate glossaryNational exam concept

Acceleration clause

An acceleration clause permits the lender, after a defined default and required process, to declare the entire unpaid loan balance immediately due rather than collect only the missed installment.

Exam area: Financing

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What does “acceleration clause” mean in real estate?

An acceleration clause permits the lender, after a defined default and required process, to declare the entire unpaid loan balance immediately due rather than collect only the missed installment.

How is “acceleration clause” different from the closest wrong answer?

Acceleration responds to default. An alienation or due-on-sale clause responds to an unauthorized transfer of the secured property.

What is the Georgia-specific rule?

In a Georgia security-deed transaction, acceleration can precede exercise of a power of sale, but statutory and contractual notice requirements still matter.

Worked exam example

Scenario

After uncured payment default, the lender invokes the loan clause making all remaining principal and accrued amounts due.

What is the most common exam trap?

Trap correction

Acceleration does not itself transfer ownership or complete foreclosure.

Original exam check

Apply the definition

A Georgia borrower misses several payments and does not cure the default after proper notice. The lender demands the entire remaining loan balance now. Which clause lets the lender do this?

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Related terms to learn next

Alienation clause

An alienation clause, often called a due-on-sale clause, allows a lender to require repayment of the outstanding loan when the borrower transfers the secured property without the lender's permitted assumption or consent.

Power of sale

A power-of-sale clause authorizes the secured creditor to sell the collateral after default through the contractually authorized nonjudicial foreclosure process, provided Georgia's notice, advertisement, time, place, and sale requirements are met.

Promissory note

A promissory note is the borrower's written promise to repay a debt under stated principal, interest, payment, maturity, and default terms.

Security deed

A security deed, also called a deed to secure debt, is Georgia's customary instrument for securing a real estate loan.

Recommended next complete lesson

Continue with Financing complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
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