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(1) “Open-prevent borrowing from the bank package” gets the definition established inside the Regulation Z of Federal Reserve System ( several C.F.R. 226.2(a)(20) ).

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(3) “ Repayment loan feature ” means a component away from an unbarred-avoid borrowing plan which provides to possess a different subaccount of the open-end credit plan pursuant that the primary off, and you will focus toward, the mortgage regarding the you to definitely subaccount will be reduced inside significantly equivalent installment payments more a designated period in place of mention of the latest count an excellent under other element of open-prevent borrowing from the bank bundle or the payment plan according to the most other element.

(b)(1) Except since the otherwise available with statute, the newest debtor significantly less than any fees mortgage shall be entitled to prepay the complete otherwise people part of the cost mortgage, including one accumulated attract, anytime.

(2) With regards to people installment loan, absolutely nothing within part should preclude a borrower from are compelled, from the a contract written down, to expend a prepayment costs; however, simply a good prepayment made in this 5 years of the time the latest cost mortgage is done may be susceptible to good prepayment charges following only since the herein established. A cost perhaps not exceeding 20 percent of the modern principal matter of your installment loan are prepaid in just about any you to definitely 12-month several months instead incurring an effective prepayment fees. (more…)