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.

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