Anticipation

To save on interest, debt can be paid before it matures. If a formalized discount or rebate is involved, the term used is anticipation rate. Prepayment is good for the borrower because it relieves him/her of the debt, but it deprives the lender of interest he/she would have received otherwise. As a result, some lenders attach prepayment penalties to loans to disincentivize prepayments.