Debt Cancellation Contract

AAA

DEFINITION of 'Debt Cancellation Contract'

A contract in which a bank agrees to cancel all or part of a customer's obligation to repay a loan due to an event such as death, disability or involuntary loss of employment. A debt cancellation contract is an alternative to a life insurance plan.

INVESTOPEDIA EXPLAINS 'Debt Cancellation Contract'

Debt cancellation contracts are a product that banks offer in lieu of credit insurance plans for credit cards and other forms of bank credit. Instead of credit insurance premiums, the customer pays the bank a fee.

RELATED TERMS
  1. Return Protection

    A common, but little-known credit card perk allowing cardholders ...
  2. Credit

    1. A contractual agreement in which a borrower receives something ...
  3. Credit Card

    A card issued by a financial company giving the holder an option ...
  4. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  5. Loan

    The act of giving money, property or other material goods to ...
  6. Insurance

    A contract (policy) in which an individual or entity receives ...
Related Articles
  1. Credit, Debit And Charge: Sizing Up ...
    Credit & Loans

    Credit, Debit And Charge: Sizing Up ...

  2. Digging Out Of Personal Debt
    Credit & Loans

    Digging Out Of Personal Debt

  3. 6 Major Credit Card Mistakes
    Options & Futures

    6 Major Credit Card Mistakes

  4. What You Need To Know About Bankruptcy
    Retirement

    What You Need To Know About Bankruptcy

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center