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If a borrower pays discount points or a loan origination fee, one consequence of paying the loan off early (where there is no prepayment penalty)
If a borrower pays discount points or a loan origination fee, one consequence of paying the loan off early (where there is no prepayment penalty) is: a. a decrease in the effective interest rate. b. an increase in the effective interest rate. c. no impact on effective interest. d. an increase or a decrease in effective interest, depending on how soon in the amortization period the prepayment occurs.
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