§ 24-4.5-3-208 — Advances to perform covenants of debtor

Advances to Perform Covenants of
Debtor. — (1) If the agreement with respect to a consumer loan,
refinancing, or consolidation contains covenants by the debtor to
perform certain duties pertaining to insuring or preserving collateral
and if the lender pursuant to the agreement pays for performance of the
duties on behalf of the debtor, the lender may add the amounts paid to
the debt. Within a reasonable time after advancing any sums, he shall
state to the debtor in writing the amount of the sums advanced, any
charges with respect to this amount, and any revised payment schedule
and, if the duties of the debtor performed by the lender pertain to
insurance, a brief description of the insurance paid for by the lender
including the type and amount of coverages. No further information
need be given.
(2) A loan finance charge may be made for sums advanced pursuant
to subsection (1) at a rate not exceeding the rate stated to the debtor
pursuant to the provisions on disclosure (Part 3) with respect to the
loan, refinancing, or consolidation, except that with respect to a
revolving loan account the amount of the advance may be added to the
unpaid balance of the debt and the lender may make a loan finance
charge not exceeding that permitted by the provisions on loan finance
charge for consumer loans (24-4.5-3-201) or for supervised loans
(24-4.5-3-508), whichever is appropriate.
Formerly: Acts 1971, P.L.366, SEC.4.