SECTIONS 18634-18643

18634.  This article is applicable only to premium finance agencies.18635.  Whenever the interest or charges, or interest and chargesdeducted in advance exceed the maximum provided by this division, byreason of subsequent repayment of the loan, a new loan, refinancing,or otherwise, or any portion thereof prior to maturity, such excessshall be rebated to the borrower or credited on any balance owing bythe borrower to the company. The rebate shall be the differencebetween the total of the precomputed charge, any charge for extendingthe first due date, plus any default or deferment charges and thecharges at the contract rate computed on unpaid principal balancesfor the number of days actually elapsed by applying each paymentfirst to charges and the remainder to principal. The tender, by theborrower or at his request, of an amount equal to the unpaid balanceless the required rebate must be accepted by the company in fullpayment of the loan contract.18636.  (a) As an alternative to the provisions of Section 18635, ifa loan is repayable in substantially equal and consecutive monthlyinstallments of principal and charges combined, the first of which isdue not less than 15 days nor more than one month and 15 days fromthe date the loan is made, a company may precompute charges and applypayments as provided in this article. (b) The total charges which would be earned if the loan contractwere repaid exactly according to its terms, at the monthly ratestated in the loan contract, may be precomputed when the loan is madeand added to the principal of the loan. Every payment may be appliedto the combined total of principal and precomputed charges until theloan contract is fully paid. (c) The portion of the precomputed charge applicable to anyparticular monthly installment period shall bear the same ratio tothe total precomputed charge, excluding any adjustment made for afirst period of more or less than one month, as the balance scheduledto be outstanding during that monthly period bears to the sum of allmonthly balances scheduled originally by the loan contract.18637.  If a loan contract made under Section 18636 is prepaid infull by cash, a new loan, refinancing or otherwise before the finalinstallment date, the borrower shall receive a rebate of the portionof the precomputed charge applicable to the full installment periodsfollowing the installment date nearest the date of such prepayment;provided, however, that if prepayment in full occurs on or before thethird installment date the rebate shall be the difference betweenthe total precomputed charge and the charges at the contract ratecomputed on unpaid principal balances by applying each payment firstto charges and the remainder to principal. After the thirdinstallment date, any prepayment made on or before the 15th dayfollowing an installment date shall be deemed to have been made onthe installment date preceding such prepayment. The tender, by theborrower or at his request, of an amount equal to the unpaid balanceless the required rebate must be accepted by the company in fullpayment of the loan contract.18638.  A special rebate of precomputed charges shall be made ifthree or more, but not all, installments are prepaid in full at anyone time either in one transaction or over a period of time on a loanmade under Section 18636. The special rebate shall be equal to theportion of precomputed charge applicable to the last installmentperiod multiplied by the total number of full installment periodssuch installments and any subsequent installments are prepaid. Suchspecial rebate shall be computed and made at the termination of theloan contract and shall be an addition to any required rebate forprepayment in full.18640.  A deferment charge may be charged and collected on a loanmade under Section 18636 if the payment date of all wholly unpaidinstallments on which no default charge has been collected isdeferred one or more full months and the loan contract so provides.Such deferment charge shall not exceed the portion of precomputedcharge applicable, prior to deferment, to the first deferred monthlyinstallment period multiplied by the number of months the maturity ofthe contract is deferred. Such number of months shall not exceed thenumber of full installments which are in default on the date ofdeferment or which may become due within 15 days of such date. When adeferment charge is made, no portion of the precomputed charge shallapply to the installment periods in which no installment payment isrequired by reason of the deferment. In computing any default chargeor required rebate, the portion of the precomputed charge applicableto each deferred balance and installment period following thedeferment period and prior to the deferred maturity shall remain thesame as that applicable to such balances and periods under theoriginal contract of loan. Such charge may be collected at the timeof deferment or at any time thereafter. Any payment received at thetime of deferment may be applied first to the deferment charge andthe remainder, if any, applied to the unpaid balance of the loancontract; provided, however, if such payment is sufficient to pay, inaddition to the appropriate deferment charge, any installment whichis in default and the applicable default charge, it shall be first soapplied and any such installment shall not be deferred nor subjectto the deferment charge.18642.  If the maturity of a loan made under Section 18636 isaccelerated for any reason, the company shall make the same refund orcredit as would be required if the loan contract was paid in full onthe date of acceleration and the unpaid balance shall be treated asthe unpaid principal balance and thereafter the unpaid balance of theloan contract shall bear charges at the agreed rate of charge if theloan contract so provides.18643.  Notwithstanding any other provision of law not within thisarticle, with respect to precomputed loans, premium finance agenciesderive authority only from this article.