New Jersey § 17:9a-56

§ 17:9a-56.

A. When the unpaid balance owing upon a precomputed loan is repaid in full or the

maturity of the unpaid balance of such loan is accelerated before the date scheduled

for the payment of the final installment, the bank shall allow a credit on account

of the precomputed interest, the amount of which shall not be less than the amount

determined by the application of the formula C = AN / D (“the rule of 78's”) in which

“C” represents the amount of the credit to be given; “A” represents the amount of

the precomputed interest; “D” is determined by ascribing to each month included in

the period for which interest was, precomputed reckoning from the day upon which the

loan was made, the cardinal number descriptive of the number of months scheduled,

by the terms of the loan, to elapse from the beginning of each such month to the date

to which interest was precomputed, and the total of all the cardinal numbers so ascribed

constitutes the quantity “D”; and “N” represents the difference between the quantity

“D” and the total of all the cardinal numbers ascribed to months which have elapsed,

in whole or in part, from the date of the loan, to the day upon which such repayment

is made, or to the day upon which the maturity of the unpaid balance of such loan

is accelerated as the case may be. B. The commissioner may prepare and distribute to such banks as shall make a request

therefor, a schedule or schedules based upon the formula specified in subsection A.

of this section, for use in determining the credit to be allowed pursuant to such

subsection, and allowances of interest made as provided in such schedule shall constitute

a complete compliance with such subsection. A copy of such schedule, duly certified by the commissioner, shall be evidence in

all courts and places. C. This section shall not apply where the amount of the credit to be allowed is less

than $1.00. D. The unpaid balance of a nonprecomputed loan may be paid in full at any time without

penalty.