What is the name of the clause in a security instrument that requires the entire loan amount due immediately upon default?

The correct answer, acceleration clause, refers to a specific provision in a security instrument that allows the lender to demand the entire outstanding balance of a loan immediately when the borrower defaults on the loan agreement. This means that if the borrower fails to meet the payment terms, whether due to late payments or other breaches of the contract, the lender has the right to accelerate the loan.

The acceleration clause is crucial for lenders as it provides a mechanism for them to protect their investment. It asserts the lender's right to fast-track the payment process, allowing them to initiate foreclosure proceedings or other legal actions to recover the owed amount without having to wait for the loan to mature. This clause is a common feature in many loan agreements, as it helps mitigate risk for lenders.

In contrast, the other options serve different purposes: the default clause generally outlines the events that constitute a default; the due-on-sale clause allows a lender to call the loan due if the property is sold or transferred; and the termination clause typically pertains to ending a contract or lease agreement rather than addressing loan repayment upon default. Understanding the specific roles of these clauses within security instruments is essential for navigating loan agreements and their implications effectively.