Interest Upon Acceleration Sample Clauses

The "Interest Upon Acceleration" clause defines how interest is calculated and applied to outstanding amounts when a loan or obligation becomes immediately due, typically due to a default or breach. In practice, this clause specifies whether the accelerated debt will accrue interest at the original contract rate or at a higher default rate from the moment of acceleration. For example, if a borrower defaults, the entire remaining balance may become due and start accruing interest at a penalty rate. The core function of this clause is to clarify the financial consequences of acceleration, ensuring both parties understand the increased cost of default and providing a deterrent against late payments or breaches.