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

Keep scrolling for more

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

Reservations are prepaid, non-cancellable and non-refundable, but are transferrable. Marc Bona, cleveland.com, "Wine calendar: Autumn Wine Affair, Taste in Little Italy, Shaker Wines’ Amarone, more," 17 Sep. 2019 Reservations must be prepaid and received by 5 p.m. Monday, July 8. Houston Chronicle, "Katy-area calendar of events," 7 July 2019 Discount airlines Frontier, Spirit and Allegiant also allow travelers to prepay for bags and throw in a major perk: a price break over the fees at the airport. Dawn Gilbertson, USA TODAY, "Hate the hassle of paying bag fees at the airport? American (finally) plans to offer prepay option," 12 June 2019 Some states even provide a 529 option to prepay college tuition at today’s rates. Hua Hsu, The New Yorker, "Student Debt Is Transforming the American Family," 2 Sep. 2019 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

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.

See More

First Known Use of prepay

1839, in the meaning defined above

Keep scrolling for more

Learn More about prepay

Statistics for prepay

Last Updated

11 Oct 2019

Look-up Popularity

Time Traveler for prepay

The first known use of prepay was in 1839

See more words from the same year

Keep scrolling for more

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

Keep scrolling for more

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

Comments on prepay

What made you want to look up prepay? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

transposition of initial sounds of words

Get Word of the Day daily email!

Test Your Vocabulary

Word Puzzles

  • alt 57589b2b4c6a3
  • Which answer pairs best with each of the following words? living, estate, club, music, road, mile
Spell It

Can you spell these 10 commonly misspelled words?

TAKE THE QUIZ
Syn City

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ
Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!