New Jersey § 17:9a-59

§ 17:9a-59.

(a) Every small business loan shall be evidenced by a note which shall be dated the

day of the making of such loan, and the face amount of which shall be in an amount

determined pursuant to paragraph (h) or (i) of section 1, of this act 1 as the case may require. (b) Each such note shall provide that the amount thereof shall be payable in installments

on dates separated by payment-periods of equal duration measured in terms of months. Any such note may provide for the omission of installments, including the first

installment, during any period not exceeding 93 days in any one 12-month period. Except as herein otherwise provided, no note shall provide for payment-periods shorter

than 1 month or longer than 3 months. No such note shall provide that the final installment shall be payable more than

7 years and 3 months from the date of such note. (c) Effective on the first day of the twelfth month following the effective date of

this act, notwithstanding the provisions of section 11 of P.L.1964, c. 162 ( C. 17:9A-59.35 ), 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, calculated according to the actuarial refund method,

as if all payments were made as scheduled, or if deferred, as deferred; provided,

however, that if the loan is prepaid within 12 months after the first payment is due,

a bank may charge a prepayment penalty of not more than (1) $20.00 on any loan greater

than $2,000.00; (2) an amount equal to 1% of the loan on any loan greater than $2,000.00

and up to and including $5,000.00; and (3) $100.00 on any loan exceeding $5,000.00. 1

N.J.S.A. § 17:9A-59.25.