6-634. Precomputation of consumer loan
A. A precomputed consumer loan shall require repayment in substantially equal
consecutive monthly installments of principal and finance charges combined. The first
installment of a precomputed consumer loan is due not less than fifteen days but not more
than forty-five days after the precomputed consumer loan is made. The licensee may
precompute finance charges at the agreed consumer loan rate on scheduled unpaid principal
balances and add those charges to the principal amount of the precomputed consumer loan.
The licensee shall calculate the finance charges on precomputed loans on an annual basis
of twelve months of thirty days per month. All computations are based on the assumption
that all payments are made as scheduled. The licensee may round the consumer loan rate
to the nearest one-quarter of one per cent.
B. If a precomputed consumer loan is prepaid in full, the licensee shall provide
the consumer with a refund or credit of the precomputed finance charges that apply to all
of the fully unexpired months of the precomputed consumer loan as originally scheduled,
or if deferred, as deferred, and that follow the installment date nearest to the date of
the prepayment. For this purpose the applicable finance charge is the total of those
finance charges that would have been made for each unexpired month by applying scheduled
payments to unpaid balances of principal according to the actuarial method at that single
consumer loan rate that would result in the original amount of precomputed finance
charges on the consumer loan, assuming finance charges had not been precomputed at the
agreed to consumer loan rate but had been computed by the actuarial method at the agreed
to single consumer loan rate from the inception of the consumer loan.
C. The licensee may agree to defer payment of all wholly unpaid installments for
one or more full months and extend the due date of each installment and the maturity of
the precomputed consumer loan for the same amount of time. The deferment period is the
month or months in which the consumer makes no scheduled payment or in which no payment
is required by reason of the deferment. If a deferment is made, the licensee may charge
and collect a deferral fee that is not more than the agreed to consumer loan rate applied
to the amount or amounts deferred for the period of deferral without regard to
differences in the lengths of months, but applied proportionately for a part of a month
by counting each day as one-thirtieth of a month. The licensee may collect a deferral
fee at the time the licensee assesses the deferral fee or at any time after the
assessment. No rebate of deferral fees is required unless prepayment occurs before the
due date of the first deferred installment.
D. If the maturity of a precomputed consumer loan is accelerated, the licensee
shall reduce the outstanding balance of that precomputed consumer loan by the refund or
credit of precomputed finance charges that the consumer would be entitled to receive
pursuant to subsection B on prepayment in full on the date of acceleration. After
application of that refund or credit, the licensee may charge and receive finance charges
at the agreed to consumer loan rate computed on the unpaid balances of the consumer loan
for the actual time outstanding from the installment date nearest the date of
acceleration until paid in full.
E. The note or agreement evidencing a precomputed consumer loan may provide that
the licensee, with or without accelerating maturity, may recompute the entire consumer
loan on a per cent per month basis or may reduce the outstanding balance as of any
installment date by the refund or credit of precomputed finance charges that the consumer
would be entitled to receive pursuant to subsection B on prepayment in full on the
installment date. After recomputing the loan or applying the refund or credit of
precomputed finance charges, the licensee may charge and receive finance charges at the
agreed to consumer loan rate computed on unpaid balances of the consumer loan for the
actual time outstanding from the installment date until the consumer loan is paid in
full.
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