North Carolina § 53-173 - Computation of interest; application of payments; limitation on interest after judgment; limitation on interest after maturity of the loan.

§ 53-173. Computation of interest; application of payments; limitation on interest after judgment; limitation on interest after maturity of the loan.

, (a1) Repealed by Session Laws 2013-162, s. 3, effective July 1, 2013. Computation of Interest. - Interest on loans made pursuant to this section shall not be paid, deducted, or received in advance. Such interest shall not be compounded but interest on loans shall (i) be computed and paid only as a percentage of the unpaid principal balance or portion thereof and (ii) computed on the basis of the number of days actually elapsed; provided, however, if part or all of the consideration for a loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the loan contract may include any unpaid interest on the prior loan which have accrued within 90 days before the making of the new loan contract. For the purpose of computing interest, a day shall equal 1/365th of a year. Application of Payments. - Any payment made on a loan shall be applied first to late charges and other permissible charges under this Article, then to any accrued interest, and then to principal. Any portion or all of the principal balance may be prepaid at any time without penalty. Limitation on Interest after Judgment. - If a money judgment is obtained against any party on any loan made under the provisions of this section neither the judgment nor the loan shall carry, from the date of the judgment, any interest in excess of eight percent (8%) per annum. Limitation of Interest after Maturity of Loan. - After the maturity date of any loan contract made under the provisions of this section and until the loan contract is paid in full by cash, new loan, refinancing or otherwise, no charges other than interest at eight percent (8%) per annum shall be computed or collected from any party to the loan upon the unpaid principal balance of the loan. Repealed by Session Laws 1989, c. 17, s. 3. Repealed by Session Laws 2001-519, s. 3, effective January 1, 2002. History (1961, c. 1053, s. 1; 1969, c. 1303, ss. 13, 17-22; 1973, c. 1042, s. 3; 1975, c. 110, s. 1; 1979, c. 33, s. 2; 1981, c. 561, ss. 1-3; 1983, c. 68, s. 1; c. 126, s. 13; 1989, c. 17, s. 3; 2001-519, s. 3; 2013-162, s. 3.) Effect of Amendments. - Session Laws 2013-162, s. 3, effective July 1, 2013, substituted "Computation of interest; application of payments" for "Maximum rate of interest and fee; computation of interest" in the section heading; deleted subsections (a) and (a1); deleted the last sentence in subsection (b) which read: "Any payment made on a loan shall be applied first to any accrued interest and then to principal, and any portion or all of the principal balance may be prepaid at any time without penalty."; and added subsection (b1). Legal Periodicals. - For comment on usury law in North Carolina, see 47 N.C.L. Rev. 76 (1969). For note on choice of law rules in North Carolina, see 48 N.C.L. Rev. 343 (1970). For note discussing the appropriate disclosure of inconsistent federal and state requirements with regard to credit terms, see 15 Wake Forest L. Rev. 793 (1979).