Utilization Fee

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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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RELATED FAQS
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    Public companies fund their operational needs and capital expenditures with equity or debt. Most often, companies choose ... Read Full Answer >>
  3. What is the difference between subordinated debt and senior debt?

    The difference between subordinated debt and senior debt is the priority in which the debt claims are paid by a firm in bankruptcy ... Read Full Answer >>
  4. How would a standby letter of credit be used during an export transaction?

    A standby letter of credit is typically used to provide a bank guarantee of payment for an exporter in the event that an ... Read Full Answer >>
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    Consumers and businesses use credit to finance major purchases or emergency expenses that exceed regular cash flow. Credit ... Read Full Answer >>
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