Okuzeka
Finance & Banking vocabulary · Loans & Credit

Commitment fee

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, commitment fee means: A fee for a lender's agreement to make funding available, often charged on an undrawn commitment.

In Turkish: kredi taahhüt komisyonu

How it is used

Check the contractual base and charging period; this fee differs from interest on borrowed funds.

Example sentences

  1. The company paid a commitment fee on the unused part of its credit line.

    The fee compensates availability even when funds are not drawn.

  2. The lender reduced the commitment fee when the facility was renewed.

    Renewal can change the price of maintaining access to credit.

Common collocations

  • annual commitment fee
  • undrawn commitment fee
  • credit facilityAn arrangement in which a bank agrees to lend a company up to a set amount, which the company can draw on as needed under agreed terms.
  • bank chargesFees that a bank takes for its services, such as account maintenance, transfers, overdrafts or replacing a card.

More terms: Loans & Credit

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This page explains English vocabulary for learners. It is not financial advice.