Commitment Fee

A fee lenders charge their borrowers for unused credit or credit that has been promised at a specified future date.

A commitment fee is different from interest; although, the two are often confused. A lender charges a borrower a commitment fee to keep a line of credit open, or to guarantee a loan at a certain future date even though the credit is not being used at that particular time.


Investment dictionary. . 2012.

Look at other dictionaries:

  • commitment fee — England, Wales commitment fee, Also known as commitment commission. A fee payable by the borrower to the lender under a loan agreement calculated by reference to the amount of the undrawn and uncancelled loan during the availability period. In a… …   Law dictionary

  • Commitment fee — A fee paid to a commercial bank in return for its legal commitment to lend funds that have not yet been advanced. The New York Times Financial Glossary * * * commitment fee commitment fee ➔ fee * * *    A fee paid by a borrower for a lender s… …   Financial and business terms

  • commitment fee — fee paid to receive an extension of credit …   English contemporary dictionary

  • commitment fee — Fin a fee that a lender charges to guarantee a rate of interest on a loan a borrower is soon to make. Also known as establishment fee …   The ultimate business dictionary

  • commitment fee — An amount charged by a bank to keep open a line of credit or to continue to make unused loan facilities available to a potential borrower. See firm commitment …   Big dictionary of business and management

  • commitment fee — Amount paid to lender by borrower for loan commitment in addition to interest. Such are common in real estate transactions …   Black's law dictionary

  • commitment fee — A fee charged by a bank to keep open a line of credit or to continue to make available unused loan facilities. Usually the annual charge is made by the lender on the daily undrawn balance of the facility and is often expressed in basis points …   Accounting dictionary

  • commitment fee — /kə mɪtmənt fi:/ noun a fee paid to a bank which has arranged a line of credit which has not been fully used …   Dictionary of banking and finance

  • commitment commission — England, Wales commitment fee, Also known as commitment commission. A fee payable by the borrower to the lender under a loan agreement calculated by reference to the amount of the undrawn and uncancelled loan during the availability period. In a… …   Law dictionary

  • commitment — n 1: an act of committing: as a: placement in or assignment to a prison or mental hospital petition for commitment compare incompetent, interdiction ◇ Commitment to a mental health facility is called …   Law dictionary

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