§ 24-4.5-2-210 — Rebate upon prepayment

Rebate upon Prepayment — (1) Except for
subsections (2) and (9), this section applies only to a sale agreement
entered into before July 1, 2020. Except as provided in subsection (2),
upon prepayment in full of the unpaid balance of a precomputed
consumer credit sale, refinancing, or consolidation, an amount not less
than the unearned portion of the credit service charge calculated
according to this section shall be rebated to the buyer. If the rebate
required is less than one dollar ($1), no rebate need be made.
(2) Upon prepayment in full of a consumer credit sale, refinancing,
or consolidation, other than one pursuant to a revolving charge account,
if the credit service charge then earned is less than any permitted
minimum credit service charge (IC 24-4.5-2-201(8)) contracted for,
whether or not the sale, refinancing, or consolidation is precomputed,
the seller may collect or retain the minimum charge, as if earned, not
exceeding the credit service charge contracted for.
(3) The unearned portion of the credit service charge is a fraction of
the credit service charge of which the numerator is the sum of the
periodic balances scheduled to follow the computational period in
which prepayment occurs, and the denominator is the sum of all
periodic balances under either the sale agreement or, if the balance
owing resulted from a refinancing (IC 24-4.5-2-205) or a consolidation
(IC 24-4.5-2-206), under the refinancing agreement or consolidation
agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to be
outstanding on the last day of a computational period before
deducting the payment, if any, scheduled to be made on that day;
(b) "computational period" means one (1) month if one-half (1/2)
or more of the intervals between scheduled payments under the
agreement is one (1) month or more, and otherwise means one (1)
week;
(c) the "interval" to the due date of the first scheduled installment
or the final scheduled payment date is measured from the date of
a sale, refinancing, or consolidation, or any later date prescribed
for calculating maximum credit service charges (IC 24-4.5-2-201(5)) and includes either the first or last day of the
interval; and
(d) if the interval to the due date of the first scheduled installment
does not exceed one (1) month by more than fifteen (15) days
when the computational period is one (1) month, or eleven (11)
days when the computational period is one (1) week, the interval
shall be considered as one (1) computational period.
(5) This subsection applies only if the schedule of payments is not
regular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due date of the first
scheduled installment is less than one (1) month by more than
five (5) days, or more than one (1) month by more than five (5)
but not more than fifteen (15) days, the unearned credit service
charge shall be increased by an adjustment for each day by
which the interval is less than one (1) month and, at the option
of the seller, may be reduced by an adjustment for each day by
which the interval is more than one (1) month; the adjustment for
each day shall be one-thirtieth (1/30) of that part of the credit
service charge earned in the computational period prior to the
due date of the first scheduled installment assuming that period
to be one (1) month; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number of
days less than a full month, the additional number of days shall
be considered a computational period only if sixteen (16) days
or more. This clause applies whether or not clause (i) applies.
(b) Notwithstanding subdivision (a), if the computational period is
one (1) month, the number of days in the interval to the due date
of the first installment exceeds one (1) month by not more than
fifteen (15) days, and the schedule of payments is otherwise
regular, the seller, at the seller's option, may exclude the extra days
and the charge for the extra days in computing the unearned credit
service charge; but if the seller does so and a rebate is required
before the due date of the first scheduled installment, the seller
shall compute the earned charge for each elapsed day as
one-thirtieth (1/30) of the amount the earned charge would have
been if the first interval had been one (1) month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due date of this
first scheduled installment is less than five (5) days or more than
nine (9) days but not more than eleven (11) days, the unearned
credit service charge shall be increased by an adjustment for
each day by which the interval is less than seven (7) days and, at
the option of the seller, may be reduced by an adjustment for
each day by which the interval is more than seven (7) days; the
adjustment for each day shall be one-seventh (1/7) of that part of
the credit service charge earned in the computational period
prior to the due date of the first scheduled installment assuming
that period to be one (1) week; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number of
days less than a full week, the additional number of days shall be
considered a computational period only if five (5) days or more.
This clause applies whether or not clause (i) applies.
(6) If a deferral (IC 24-4.5-2-204) has been agreed to, the unearned
portion of the credit service charge shall be computed without regard
to the deferral. The amount of deferral charge earned at the date of
prepayment shall also be calculated. If the deferral charge earned is
less than the deferral charge paid, the difference shall be added to the
unearned portion of the credit service charge. If any part of a deferral
charge has been earned but has not been paid, that part shall be
subtracted from the unearned portion of the credit service charge or
shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention by the
seller of delinquency charges (IC 24-4.5-2-203.5).
(8) If the maturity is accelerated for any reason and judgment is
obtained, the buyer is entitled to the same rebate as if payment had
been made on the date judgment is entered.
(9) Upon prepayment in full of a consumer credit sale by the
proceeds of consumer credit insurance (as defined in IC 24-4.5-4-103),
the buyer or the buyer's estate shall pay the same credit service charge
or receive the same rebate as though the buyer had prepaid the
agreement on the date the proceeds of the insurance are paid to the
seller, but no later than ten (10) business days after satisfactory proof
of loss is furnished to the seller. This subsection applies whether or not
the credit sale is precomputed.
(10) Upon prepayment in full of a transaction with a term of more
than sixty-one (61) months, the unearned part of the credit service
charge shall be computed by applying the disclosed annual percentage
rate that would yield the credit service charge originally contracted for
to the unpaid balances of the amount financed for the full
computational periods following the prepayment, as originally
scheduled or as deferred.
Formerly: Acts 1971, P.L.366, SEC.3. As amended by
P.L.14-1992, SEC.18; P.L.122-1994, SEC.14; P.L.2-1995, SEC.91;
P.L.176-1996, SEC.4; P.L.85-2020, SEC.8.
(Part 3. Disclosure)