prepay

verb
pre·​pay | \ (ˌ)prē-ˈpā How to pronounce prepay (audio) \
prepaid\ (ˌ)prē-​ˈpād How to pronounce prepaid (audio) \; prepaying

Definition of prepay

transitive verb

: to pay or pay the charge on in advance

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Other Words from prepay

prepayment \ (ˌ)prē-​ˈpā-​mənt How to pronounce prepayment (audio) \ noun

Examples of prepay in a Sentence

Special orders must be prepaid.

Recent Examples on the Web

Passengers who prepaid for activities on that island will get refunds. Washington Post, The Denver Post, "Hurricane Dorian slips past Puerto Rico, heads to Florida," 29 Aug. 2019 Historically, Huy Fong would prepay Underwood Ranches for the estimated costs associated with growing and harvesting the chilies. Alexa Díaz, latimes.com, "Jalapeño farmer wins $23.3 million in heated dispute with Sriracha maker," 12 July 2019 Sprint sells prepaid under the Boost and Virgin brands, AT&T has Cricket, and T-Mobile owned the MetroPCS brand for several years before changing its name to Metro by T-Mobile last year. Aaron Pressman, Fortune, "How Verizon-Owned Wireless Service Visible Is Getting More Appealing," 26 June 2019 To date, 27 companies have prepaid $3.3 million under the tax, said Lannom, the city tax official. oregonlive.com, "Portland retail tax applies more broadly than thought, igniting opposition at City Hall," 6 June 2019 United Airlines has offered the service during check-in for a decade and is testing the option for passengers to prepay bag fees even sooner, spokeswoman Maddie King said. Dawn Gilbertson, USA TODAY, "Hate the hassle of paying bag fees at the airport? American (finally) plans to offer prepay option," 12 June 2019 Reservations are required by Saturday (June 15) and must be prepaid. Carol Kovach, cleveland.com, "Get ready to celebrate at the 10th annual Hooley on Kamm’s Corners: A Place in the Sun," 11 June 2019 Apple will pay Dialog $300 million in cash and prepay $300 million for Dialog products to be delivered over the next three years. Tripp Mickle, WSJ, "Apple Swoops Up Engineers From Key Supplier as It Bolsters In-House Chip Design," 11 Oct. 2018 Hundreds of Mecklenburg County residents rushed to prepay $2.8 million in property taxes in the last days of 2017, hoping for a benefit on their income taxes. Cassie Cope, charlotteobserver, "More than 300 Mecklenburg residents prepaid $2.8 million in taxes | Charlotte Observer," 8 Jan. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'prepay.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of prepay

1839, in the meaning defined above

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Statistics for prepay

Last Updated

13 Sep 2019

Look-up Popularity

Time Traveler for prepay

The first known use of prepay was in 1839

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More Definitions for prepay

prepayment

noun

Financial Definition of prepayment

What It Is

Prepayment occurs when a borrower pays off a loan earlier than expected.

How It Works

For example, let's say that John Doe borrows $300,000 to buy a house in Phoenix. The loan is a 30-year mortgage at 5% interest. John lives in the house for five years and makes his payments on time every month. However, in year six, he gets a job offer in Philadelphia and decides to move there. Accordingly, he sells his house. At the closing, the buyer gives John $500,000 for his house. John uses $250,000 to pay off the remaining balance on the loan instead of making 25 more years of payments. John has prepaid the loan.

Why It Matters

When a borrower prepays a loan, the borrower saves a lot of interest. But that means the lender also misses out on all that interest. Accordingly, prepayment can sometimes come with a penalty, and this is disclosed in the loan documents.

People who invest in pass-through securities are also frequently concerned about prepayment. That's because those securities that receive payments from an intermediary that collects payments from a pool of assets. The most famous of these is mortgage-backed securities (MBS), which represent an interest in a pool of mortgage loans.

When people move, as we’ve seen, they sell their houses, payoff their mortgages with the proceeds, and buy new houses with new mortgages. When interest rates fall, many homeowners refinance their mortgages, meaning they obtain new, lower-rate mortgages and pay off their higher-rate mortgages with the proceeds. This means the lenders and the MBS investors miss out on interest income due to prepayment.

Source: Investing Answers

prepay

verb

English Language Learners Definition of prepay

: to pay for (something) before you receive or use it
: to pay (something) before you are required to pay it

prepay

verb
pre·​pay | \ ˈprē-ˈpā How to pronounce prepay (audio) \
prepaid\ -​ˈpād \; prepaying

Kids Definition of prepay

: to pay or pay for beforehand prepay the bill

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pre·​pay | \ prē-ˈpā How to pronounce prepay (audio) \
prepaid; prepaying

Legal Definition of prepay

: to pay or pay the charge on in advance (as of date due or maturity date) no penalty for prepaying your student loan

Other Words from prepay

prepayment noun

More from Merriam-Webster on prepay

Rhyming Dictionary: Words that rhyme with prepay

Spanish Central: Translation of prepay

Nglish: Translation of prepay for Spanish Speakers

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