New Jersey § 17:9a-53

§ 17:9a-53.

Notwithstanding the provisions of R.S. 31:1-1 or any other law to the contrary, a banking institution may make educational loans

and may charge and collect interest thereon at a rate or rates agreed to by the banking

institution and the borrower. Interest shall be calculated according to the actuarial method, pursuant to which

payments made on the loan are applied first to accumulated interest on the principal

amount of the loan and the remainder applied to the unpaid principal balance of the

loan in reduction thereof. All payments shall be applied no later than the next day, other than a Sunday or

a public holiday, after the date of receipt, and a day shall be counted as one three-hundred-sixty-fifth

of a year. The note or other evidence of the loan may provide for an increase, or may provide

for a decrease, or both, in the rate of interest applicable to the loan. No increase during the entire loan term shall result in an interest rate of more

than 6% per annum over the rate applicable initially, nor shall the rate be raised

more than 3% per annum during any 12-month period. The lender shall not be obligated to decrease the interest rate more than 6% over

the term of the loan, nor more than 3% per annum during any 12-month period. If a rate increase is applied to the loan, the lender shall also be obligated to

adopt and implement uniform standards for decreasing the rate. If the note provides for the possibility of an increase or decrease, or both, in

the rate, that fact shall be clearly described in plain language, in at least 8-point

bold face type on the face of the note. No rate increase shall take effect during the first 3 years of the term of the loan,

or thereafter, (a) unless at least 90 days prior to the effective date of the first

such increase, or 30 days prior to the effective date of any subsequent increase,

a written notice has been mailed or delivered to the borrower that clearly and conspicuously

describes such increase, and (b) unless at least 365 days have elapsed without any

increase in the rate. No increase during the entire loan term shall result in an interest rate of more

than 6% per annum over the rate applicable initially, nor shall the rate be raised

more than 3% per annum during any 12-month period.