Curtailment payment is generally when a payment is reduced or cut off. Typically, this is a term we see used when dealing with home mortgages. Curtailment payments are generally used by a person who borrows or is loaned money to reduce the amount of monthly payments. Although typically seen in mortgage documents, curtailment payment is also used in an array of different business techniques. For
. example, car companies use curtailment payments on older model vehicles.