DEFINITION of 'Utilization Fee'

An annual fee assessed by a lender against a borrower. The fee is based on the amount of credit actually used by a borrower in a revolving line of credit or term loan.

BREAKING DOWN 'Utilization Fee'

The fee is based on the actual amount of funds that is used from a line of credit or term loan. The borrower must pay the utilization fee, in addition to other fees, as part of the terms of the line of credit or term loan.

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