The Law Dictionary

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LOAN COMMITMENT Definition & Legal Meaning

Definition & Citations:

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.

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