The article discusses how lenders price prepayment options in commercial and industrial loans. Prepayment penalties are like fees for a call option at the loan's start. Businesses refinance when rates drop or their credit improves, and prepay to optimize their finances. The value of prepayment options depends on market conditions and borrower creditworthiness. The study uses a model to price prepayment contracts, considering default risk and transaction costs. The value of prepayment options is highest in the early loan periods. For variable-rate loans, the value is not affected by interest rate volatility but is sensitive to credit spread volatility.