Arizona Laws 6-637. Term; payments
A. The scheduled term of a consumer loan shall not be longer than the following:
Terms Used In Arizona Laws 6-637
- Consumer: means an individual who obtains a consumer lender loan for personal, family or household purposes. See Arizona Laws 6-601
- Consumer lender: means a person that advertises to make or procure, solicits or holds itself out to make or procure, or makes or procures consumer lender loans to consumers in this state. See Arizona Laws 6-601
- Consumer loan: means the direct closed end loan of money, whether unsecured or secured by personal or real property, in an amount of $10,000 or less that is subject to a finance charge in which only the principal amount of the loan is considered, and not any finance charges or other fees allowed pursuant to section 6-635, for the purpose of determining whether the consumer loan is $10,000 or less. See Arizona Laws 6-601
- Consumer revolving loan: means an open end revolving loan that is established pursuant to an agreement with an agreed on credit limit that does not exceed $10,000, that the consumer may pay in full at any time but has the privilege of paying in installments and that contemplates or provides that advances may be obtained from time to time by the consumer, through checks, drafts, items, credit access devices, orders for the payment of money, evidences of debt or similar means, whether or not negotiable. See Arizona Laws 6-601
- Contract: A legal written agreement that becomes binding when signed.
- Home equity revolving loan: means an open end revolving loan that is made pursuant to an agreement with an agreed on credit limit that is not more than $10,000, that is secured by the consumer's principal residence and that provides that advances may be obtained from time to time by the consumer through checks, drafts, items, credit access devices, orders for the payment of money, evidences of debt or similar means, whether or not negotiable. See Arizona Laws 6-601
- Licensee: means a person licensed pursuant to this chapter. See Arizona Laws 6-601
- Lien: A claim against real or personal property in satisfaction of a debt.
- Property: includes both real and personal property. See Arizona Laws 1-215
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- United States: includes the District of Columbia and the territories. See Arizona Laws 1-215
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
1. Twenty-four months and fifteen days from the date of making a consumer loan of one thousand dollars or less.
2. Thirty-six months and fifteen days from the date of making a consumer loan of more than one thousand dollars but not more than two thousand five hundred dollars.
3. Forty-eight months and fifteen days from the date of making a consumer loan of more than two thousand five hundred dollars but not more than four thousand dollars.
4. Sixty months and fifteen days from the date of making a consumer loan of more than four thousand dollars but not more than six thousand dollars.
5. Any agreed on time period for a consumer loan of more than six thousand dollars.
B. The note evidencing a consumer loan shall provide for the scheduled repayment of principal and finance charges in approximately equal periodic installments.
C. Pursuant to the provisions of 12 United States Code § 3804, subsections A and B of this section shall not be superseded by the provisions of 12 United States Code § 3803.
D. Balloon payments, prepayment penalties, call options and other contract provisions that permit a consumer lender to accelerate payment of a consumer revolving loan or home equity revolving loan for any reason other than the consumer’s default as provided in the agreement evidencing the consumer revolving loan or home equity revolving loan are prohibited, except that a licensee may include a call option to be exercised at least fifteen years after the date of the agreement. If the licensee exercises this call option and the consumer revolving loan or home equity revolving loan is not in default, the licensee shall amortize the amount due on the account over at least sixty monthly installments.
E. Except as provided in subsection D of this section, an agreement evidencing a consumer revolving loan or home equity revolving loan shall provide that on termination of the right to obtain advances the outstanding principal balance and finance charges at the time of termination of the right to obtain advances are repayable in installments if a consumer is not in default as provided in the agreement. These installments shall provide for the scheduled repayment of principal and finance charges in approximately equal periodic installments except as a result of an adjustment in the index on which a variable rate of periodic finance charges is based. These installments are payable within the following time limits:
1. Twenty-four months and fifteen days from the date of termination of the right to obtain advances for an outstanding principal balance on that date of one thousand dollars or less.
2. Thirty-six months and fifteen days from the date of termination of the right to obtain advances for an outstanding principal balance on that date that is more than one thousand dollars but not more than two thousand five hundred dollars.
3. Forty-eight months and fifteen days from the date of termination of the right to obtain advances for an outstanding principal balance on that date that is more than two thousand five hundred dollars but not more than four thousand dollars.
4. Sixty months and fifteen days from the date of termination of the right to obtain advances for an outstanding principal balance on that date that is more than four thousand dollars but not more than six thousand dollars.
5. Any agreed on time period for an outstanding principal balance that is more than six thousand dollars on the date of termination of the right to obtain advances.
F. A licensee shall permit a consumer to prepay any scheduled installment or additional amount due on any consumer lender loan in advance at any time during the licensee’s regular business hours, but the licensee may apply that prepayment first to all finance charges accrued through the date of that prepayment.
G. On payment in full or renewal of a consumer lender loan, the licensee shall provide written notice of payment and release to the consumer, or if more than one consumer is obligated on the consumer lender loan, to any one of the consumers. The notice of payment and release shall include the date of the original note or agreement evidencing the consumer lender loan and the date of payment in full. In lieu of the notice of payment and release, the licensee may return the original note or agreement evidencing the consumer lender loan marked paid or renewed, as applicable. The licensee shall release any lien or security interest on property securing a consumer lender loan that is paid in full as provided in section 33-707 for real property and section 47-9513 for personal property. This subsection does not apply to a consumer revolving loan or home equity revolving loan on which there is no unpaid balance if the consumer’s right to receive advances on the account continues in effect.