Which clause in a security instrument allows the lender to demand full payment upon default?

The acceleration clause is a critical component in a security instrument, such as a mortgage or promissory note. This clause grants the lender the right to demand the entire balance of the loan to be paid in full if the borrower defaults on the terms of the agreement. Default could be defined by various factors, such as failure to make timely payments or violating other terms of the loan agreement.

When the acceleration clause is invoked, it effectively accelerates the repayment schedule, meaning the lender can skip the usual process of waiting for the next payment and require the borrower to pay off the entirety of the unpaid balance immediately. This is an important measure that protects the lender's interests and minimizes potential losses in the event of borrower default.

In comparison, the default clause generally outlines what constitutes a default and the possible consequences but does not specifically empower the lender to call for immediate full payment. The prepayment clause allows borrowers to pay off part or all of their loan early without penalty, while the termination clause refers to the conditions under which the loan agreement may be ended. Therefore, the acceleration clause distinctly serves the role of allowing for full payment upon default, making it the correct answer.