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Callable Debt

Definition - What does Callable Debt mean?

Callable debt is a type of debt that can be called in for complete repayment before the scheduled maturity date. This includes repayment of the principal as well as the complete payment of the interest. Callable debts are often called in if there is significant evidence that the borrower does not intend to continue making steady payments.

Justipedia explains Callable Debt

For debts that are not callable, the lender cannot simply call in the debt to be paid in full at any time. Instead, if a debtor stops making payments, the lender can foreclose on the debtor. For example, a man who stops paying his mortgage can have his home foreclosed on. This would begin the process of the lender taking back the assets. However, with callable debt, the full value of the debt is expected immediately once it is called in. So, if the same man had a callable debt mortgage, he would instantly owe the full value of the remainder of the mortgage if it was called in.

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