Commitment Fee

Last Updated: Jun 6, 2019

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A fee charged by a lender for its commitment to make a loan to a prospective borrower -- usually, subject to the prospective borrower's satisfaction of certain conditions set forth in the commitment letter or financing agreement.

"Commitment Fee" also refers to a fee that is paid on the undrawn portion of a committed revolving credit facility as compensation to the lender for setting aside money for borrowing.