An acceleration clause is commonly invoked after which event?

• A. After a default event occurs
• B. After the borrower asks for more time
• C. After the loan reaches 90% of balance
• D. After borrower misses one payment

Answer: (A)

An acceleration clause lets the lender demand full repayment of the loan if the borrower defaults. The event that triggers this is a default on the loan terms—such as missing payments, breaching covenants, or insolvency/bankruptcy. Because acceleration is tied to the occurrence of a default, it’s described as being invoked after a default event occurs. It isn’t about asking for more time (that would be forbearance or modification), and reaching a specific balance, like 90%, isn’t a standard trigger on its own. Missing a payment is a form of default, but the broad concept is that any default can activate acceleration.