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| What is Lock-In Period?
Lock-In Period could mean two different things. The first meaning stands for the amount of time until the borrower's can't start paying back without any extra penalties. This time has to pass so the lender get some profit on his invested money. The second meaning stands for during this time the creditor will hold the interest unchanged and not taking in consideration the markets fluctuations.
For example you take out a loan and you want to repay it before the agreed time of the first account. In this case the creditor has to ensure him self to gain something about his investment and he puts up a penalty for early repayments. Another example is that you strike a deal with your lender and he'll ignore the market rates for a given time so your interest rate will be stable during that period. | | | | |
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