§ 24-4.5-3-210 — Rebate upon prepayment

Rebate upon Prepayment. — (1) Except
for subsections (2) and (9), this section applies only to a loan
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 loan, refinancing, or consolidation, an amount
not less than the unearned portion of the loan finance charge calculated
according to this section shall be rebated to the debtor. If the rebate
otherwise required is less than one dollar ($1), no rebate need be made.
(2) Upon prepayment in full of a consumer loan, refinancing, or
consolidation, other than one (1) under a revolving loan account, if the
loan finance charge earned is less than any permitted minimum loan
finance charge (IC 24-4.5-3-201(7) or IC 24-4.5-3-508(7)) contracted
for, whether or not the consumer loan, refinancing, or consolidation is
precomputed, the lender may collect or retain the minimum loan
finance charge, as if earned, not exceeding the loan finance charge
contracted for.
(3) The unearned portion of the loan finance charge is a fraction of
the loan finance 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 loan agreement or, if the balance
owing resulted from a refinancing (IC 24-4.5-3-205) or a consolidation
(IC 24-4.5-3-206), 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) "computation 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 loan, refinancing, or consolidation, 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 loan
finance 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 lender, 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 loan finance 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 lender, at the lender's option, may exclude the extra
days and the charge for the extra days in computing the unearned
loan finance charge; but if the lender does so and a rebate is
required before the due date of the first scheduled installment, the
lender 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 the
first scheduled installment is less than five (5) days, or more
than nine (9) days, but not more than eleven (11) days, the
unearned loan finance 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 lender, 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 loan finance 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 24-4.5-3-204) has been agreed to, the unearned
portion of the loan finance 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 loan finance 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 loan finance charge or shall
be added to the unpaid balance.
(7) This section does not preclude the collection or retention by the
lender of delinquency charges (IC 24-4.5-3-203.5).
(8) If the maturity is accelerated for any reason and judgment is
obtained, the debtor 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 loan by the proceeds of
consumer credit insurance (as defined in IC 24-4.5-4-103), the debtor
or the debtor's estate shall pay the same loan finance charge or receive
the same rebate as though the debtor had prepaid the agreement on the
date the proceeds of the insurance are paid to the lender, but no later
than ten (10) business days after satisfactory proof of loss is furnished
to the lender. This subsection applies whether or not the loan is
precomputed.
(10) Upon prepayment in full of a transaction with a term of more
than sixty-one (61) months, the unearned loan finance charge shall be
computed by applying the disclosed annual percentage rate that would
yield the loan finance 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.4. As amended by
P.L.14-1992, SEC.30; P.L.122-1994, SEC.22; P.L.2-1995, SEC.92;
P.L.176-1996, SEC.6; P.L.85-2020, SEC.15.
(Part 3. Disclosure)