[§480J-4] Authorized interest rate.

507 words·~2 min read·/hi/480j-4

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)Subject to section 480J-2(a)(3), an installment lender may contract for and receive interest at a rate not exceeding thirty-six per cent per year on that portion of the unpaid principal balance of the installment loan. Loans shall be precomputed. Any loan charges assessed in compliance with this chapter shall be exempt from chapter 478.

(b)For the purposes of computing precomputed loans, including calculating interest, a month shall be considered one-twelfth of a year and a day shall be considered one three hundred sixty-fifth of a year when calculation is made for a fraction of a month.

(c)Subject to section 480J-2(b), installment loans shall be repayable in substantially equal and consecutive installments of principal and interest combined; provided that the first installment period may exceed one month by not more than fifteen days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days; provided further that monthly installment payment dates may be omitted if the parties agree in writing, either in the written agreement required under section 480J-3 or in a subsequent agreement, to accommodate consumers with seasonal income.

(d)Payments may be applied to the combined total of principal and precomputed interest until maturity of the installment loan, with priority given to any past due interest before applying payments to loan charges and then to the principal.

(e)If an installment loan is prepaid in full or renewed prior to the loan's maturity date, the lender shall refund to the consumer a prorated portion of the unearned and unaccrued interest and monthly maintenance fees based on a ratio of the number of days the loan was outstanding and the number of days for which the loan was originally contracted.

(f)The parties may agree in writing, either in the written agreement required under section 480J-3 or in a subsequent agreement, to a deferment of wholly unpaid installments; provided that:

(1)A deferment shall postpone the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period;

(2)The deferment period shall be that period during which no installment is scheduled to be paid by reason of the deferment; and

(3)The lender shall not charge or collect a deferment fee.

(g)Other than the interest and loan charges permitted under this section, no further or other amount shall be charged or required by the installment lender.

(h)A lender shall not charge or receive loan origination fees.

(i)A lender shall not collect a default charge on any installment not paid in full within ten days after its due date. A lender may charge a default charge of $30 on an installment not paid in full after ten days have passed since its due date. For purposes of this subsection, all installments shall be considered paid in the order in which they become due. [L 2021, c 56, pt of §2]