Termination Statement


DEFINITION of 'Termination Statement'

A statement that releases a lender's claim on property or collateral of a borrower when a loan is repaid. Termination statements also terminate the financing statement created by the loan. These statements officially clear the borrower's name of the lien in public records.

BREAKING DOWN 'Termination Statement'

The Uniform Commercial Code mandates that all secured lenders sign termination statements for loans that are repaid in full. Unsecured lenders are not required to sign this form. Once a termination statement has been signed, the assets that were pledged as collateral under the previous obligations cannot be used to reassure the payments of future loans.

  1. Secured Creditor

    Any creditor or lender that takes collateral for the extension ...
  2. Collateral

    Property or other assets that a borrower offers a lender to secure ...
  3. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  4. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Financing

    The act of providing funds for business activities, making purchases ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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