6.1-330.85 - (Repealed effective October 1, 2010) Prepayment of loan described in § 6.1-330.71; rebates for unearned interest.
§ 6.1-330.85. (Repealed effective October 1, 2010) Prepayment of loandescribed in § 6.1-330.71; rebates for unearned interest.
A. Any borrower under any loan described in § 6.1-330.71 shall have the rightto anticipate payment of his debt in whole or in part at any time. As agreedto by the borrower, a lender may contract for a penalty for prepayment of thefull amount of the loan, but such prepayment penalty shall not exceed twopercent of the principal amount prepaid. However, such prepayment penalty maynot be imposed if (i) the loan is refinanced or consolidated with the samelender or a subsequent noteholder or (ii) the loan is accelerated due todefault. No penalty shall be charged in the event of partial prepayment or inthe case of an open-end credit plan where there is a payment of theoutstanding balance without a demand to release the subordinate deed of trustor mortgage. In cases where interest has been added to the face amount of anote payable in installments, the borrower shall have the right to a rebateof any unearned interest, which rebate shall be computed in accordance withthe Rule of 78 as illustrated in § 6.1-330.86 on loans (i) with an initialmaturity and corresponding amortization period of sixty-one months or lessand (ii) payable in equal periodic installments. On loans with an initialmaturity of more than sixty-one months, the borrower shall receive a rebatecomputed under a method at least as favorable to the borrower as theactuarial method.
B. The provisions of this section shall not apply to any loan made by anylender enumerated in § 6.1-330.73.
(1987, c. 622; 1990, c. 338; 1991, c. 171; 1998, c. 89.)