Lender’s binding promise that the loan amount or line-of-credit is available to the named borrower at a certain interest rate, time-bound, with a stated purpose. The commitment letter states all of the justification needed to advance the loan. Lenders charge a written commitment fee ranging generally from 0.5 percent to 2.5 percent of the loan amount.

More On This Topic

Link to This Definition
Did you find this definition of LOAN COMMITMENT helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary