69 Pa. Stat. § 620

Current through P.A. Acts 2023-32

Section 620 - Refinancing installment sale contract

A. The holder of an installment sale contract may extend the scheduled due date, or defer the scheduled payment of all or part of any unpaid installment payment or payments, or renew the unpaid time balance of such contract.

B. The holder may contract for, receive and collect a refinance charge for such extension, deferment or renewal. Such refinance charge shall not exceed the amount ascertained under either of the following methods of computation at the respective rates indicated by--

Option 1. Computing the refinance charge on the amount of the installment payment or payments or part thereof, which is refinanced for the period of time, for which each payment or part thereof is extended or deferred at the following rates on contracts originally in the respective classification of motor vehicles set forth in the preceding section of this act:

Class I. One percent (1%) per month.

Class II. One and one-half percent (1 1/2 %) per month.

Class III. Two percent (2%) per month.

Such refinance charges may be computed on the basis of a full month for any fractional month period in excess of ten (10) days.

Option 2. Computing the refinance charge on the amount obtained by adding to the unpaid time balance of the contract, charges for insurance and other charges incidental to refinancing, by adding unpaid default charges, which may be accrued, and by deducting any rebate which may be due to the buyer for prepayment incidental to refinancing, at the rate of the finance charge in the original contract, for the term of the renewal contract, and subject to the provisions of this act governing computation of the original finance charge: Provided, however, That the provisions of this act governing minimum finance charges and minimum prepayment rebate shall not apply in calculating refinance charges on the contract renewed under this method of computation.

C. The holder of an installment sale contract shall not include in any contract for refinancing such contract, any cash loan to the buyer, nor any credit extended to the buyer incidental to the purchase of goods or services: Provided, further, That the word loan herein shall not include, nor this act prohibit, a rearrangement of payments under the installment sale contract by a refinance transaction involving a restoration of certain installment payments made under the contract, but the refinance charge on such amount restored may be not more than six percent per annum, simple interest; And provided, further, however, That the holder of such contract may embody in such refinance contract the charge for accessories, equipment and parts for the motor vehicle sold under such contract, and the charge for repairs and services to such motor vehicle including finance charges thereon.

69 P.S. § 620

1947, June 28, P.L. 1110, § 20. Amended 2002, Dec. 9, P.L. 1446, No. 186, § 14, effective in 90 days.