Oregon Revised Statutes Chapter 83 § 83.130 — Voluntary prepayment by buyer; refund

Voluntary prepayment by buyer; refund. (1) Notwithstanding the provisions of any retail installment contract to the contrary, and if the rights of the purchaser have not been terminated or forfeited under the terms of the contract, any buyer may prepay in full the unpaid time balance thereof at any time before its final due date. If the buyer does so, and if the contract is not in default more than two months under any term or condition of the contract, the buyer shall receive a refund credit of the unearned portion of the service charge for the prepayment. The amount of the refund credit shall be not less than the total service charge contracted for to maturity, less the greater of: (a) Ten percent of the amount financed or $75, whichever is less; or (b) Either of the following, at the discretion of the seller or holder: (A) The service charge earned to the date of prepayment, computed by applying the effective rate on the contract to the actual principal balances outstanding, for the periods of time the balances were actually outstanding. In determining the effective rate, the holder may apply to the scheduled payments the actuarial method by which each scheduled payment is applied first to the accrued and unpaid service charges and any amount remaining is applied to the reduction of the principal balance. (B) The service charge earned to the installment due date nearest the date of prepayment, computed by applying the effective rate on the contract to the actual principal balances outstanding, for the periods of time the balances were actually outstanding. For purposes of rebate computations under this subparagraph, the installment due date preceding the date of prepayment shall be considered to be nearest if prepayment occurs 15 days or less after that installment date. If prepayment occurs more than 15 days after the preceding installment due date, the next succeeding installment due date shall be considered to be nearest to the date of prepayment. In determining the effective rate, the seller may apply to the scheduled payments the actuarial method, by which each scheduled payment is applied first to the accrued and unpaid service charges and any amount remaining is applied to reduction of the principal balance. (2) When the amount of the refund credit is less than $2, no refund need be made. [1963 c.489 §8; 1981 c.910 §1; 1983 c.432 §1]