HB4302 prohibits prepayment penalties on residential real estate loans exceeding 8% interest.
HB4302 amends the Interest Act to make it unlawful to charge prepayment penalties on loans exceeding an 8% annual interest rate for residential real estate. This applies to installment purchase contracts and bonds for deed for personal, family, or household purposes. The lender must refund any excess interest charged upon full prepayment. The bill excludes certain loans, including those under federal acts like the Housing Act of 1949 and the Veterans' Benefits Act.
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