Financial encyclopediaReviewed 2026-10-23

Prepayment Risk

The risk that principal repayment will occur earlier than scheduled, forcing the investor to reinvest at lower prevailing rates.

Sources and references ↗

PROFILE / FACT FILE

Concept at a glance

Term: Prepayment Risk [1]
Subject area: Investor.gov glossary [1]
Jurisdiction / scope: US regulatory and investor-education context [1]
Primary reference: SEC · Investor.gov [1]

Definition and explanation

The risk that principal repayment will occur earlier than scheduled, forcing the investor to reinvest at lower prevailing rates. [1]

Source-supported connections

Prepayment Risk → Mentioned in the official explanation → Principal [1]

Frequently asked questions

What does Prepayment Risk mean in the cited reference?

The risk that principal repayment will occur earlier than scheduled, forcing the investor to reinvest at lower prevailing rates. [1]

RELATION MAP

Prepayment Risk connection map

Prepayment Risk

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Links retain their source-specific meaning. Award-time affiliations and links to related reading are not claims about current appointments or economic causation.

Sources and review dates

US SEC · Investor.gov — Prepayment Risk ↗

Reviewed 23 October 2026. Historical dates and award-time affiliations retain their original context. A review date is not an event date. Background sources are identified separately from official records.

Content preparation: source-based compilation with AI assistance. See methods and attribution. Named sources identify the underlying records; no individual expert review is claimed.