70C-3-101. Prepayment of debt.

340 words·~2 min read·/ut/title-70c/chapter-3/70c-3-101

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

Effective 5/6/2026

(1)As used in this section:

(a)"Prepaid finance charge" means the same as that term is defined in 12 C.F.R. Sec. 1026.2.

(i)"Prepayment penalty" means a contingent fee that a creditor assesses against a debtor for paying all or any portion of an outstanding debt before the debt's scheduled due date.

(ii)"Prepayment penalty" does not include a prepaid finance charge.

(2)A debtor may prepay the unpaid balance of a closed-end consumer credit debt without a prepayment penalty.

(a)The unpaid balance of a closed-end consumer credit debt shall consist only of:

(i)any unpaid earned finance charge;

(ii)the unpaid principal of the debt; and

(iii)any delinquency or deferral and other allowable charges that may have been assessed before to prepayment.

(b)Except as provided in Subsection (3)(c) , the earned finance charge and unpaid principal shall be calculated only by the actuarial or United States Rule method from the date the credit is first extended to the debtor, but the creditor may accrue finance charges during any delay period pertaining to a right of rescission.

(c)A prepaid finance charge that the creditor charges on closed-end consumer credit debt is nonrefundable if the debtor prepays unless the parties expressly agree otherwise.

(d)Any costs, charges, or fees paid to third parties in connection with setting up the credit are not subject to rebate to the borrower unless the creditor becomes entitled to a rebate of any part of the cost, charge, or fee as a result of the prepayment.

(a)If a creditor accelerates the maturity of a closed-end consumer credit debt for any reason and obtains a judgment, the creditor shall calculate the unpaid balance of the debt, less any legal offset, as if the debtor had paid the debt in full on the date the court entered the judgment.

(b)The judgment shall accrue interest at the rate the parties agreed to for the debt.

Amended by Chapter 278 , 2026 General Session