Definition: Interest you pay at closing for the remainder of the month. Typically you pay your interest at the beginning of the month. If you purchase in the middle of the month, you haven't paid anything for that month. Therefore, you pay at closing for the remainder of the month.
Your prepaid interest will depend in part on your annual percentage rate (APR). Make sure you understand how APR works, and how it's calculated.
Alternate Spellings: Pre-paid interest
Examples:
I paid $300 in prepaid interest.
