North Carolina General Statutes 25A-15. Finance charge rates for consumer credit installment sale contracts
(a) With respect to a consumer credit installment sale contract, a seller may contract for and receive a finance charge not exceeding that permitted by this section. For the purposes of this section, the finance charge rates are the rates that are required to be disclosed by the Consumer Credit Protection Act, except that official fees under N.C. Gen. Stat. § 25A-10 shall be (i) included in the amount financed to the extent payment is deferred by the seller and (ii) excluded from the finance charge.
(b) Except as provided in this section, the finance charge rate imposed for a consumer credit installment sale contract shall not exceed the following rate except that a minimum finance charge of five dollars ($5.00) may be imposed:
(1) Twenty-four percent (24%) per annum where the amount financed is less than three thousand dollars ($3,000).
Terms Used In North Carolina General Statutes 25A-15
- Contract: A legal written agreement that becomes binding when signed.
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- in writing: may be construed to include printing, engraving, lithographing, and any other mode of representing words and letters: Provided, that in all cases where a written signature is required by law, the same shall be in a proper handwriting, or in a proper mark. See North Carolina General Statutes 12-3
- Lien: A claim against real or personal property in satisfaction of a debt.
- Minimum finance charge: The minimum, or fixed, finance charge that will be imposed during a billing cycle. A minimum finance charge usually applies only when a finance charge is imposed, that is, when you carry over a balance. Source: Federal Reserve
- Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- United States: shall be construed to include the said district and territories and all dependencies. See North Carolina General Statutes 12-3
(2), (3) Repealed by Session Laws 2023-60, s. 1, effective October 1, 2023, and applicable to contracts entered into, modified, or renewed on or after that date.
(4) Twenty-one percent (21%) per annum where the amount financed is three thousand dollars ($3,000) or greater.
(c) A finance charge rate not to exceed the higher of the rate established in subsection (b) of this section or the rate set forth below may be imposed in a consumer credit installment sale contract repayable in not less than six installments for a self-propelled motor vehicle:
(1) Repealed by Session Laws 2023-60, s. 1, effective October 1, 2023, and applicable to contracts entered into, modified, or renewed on or after that date.
(2) Twenty percent (20%) per annum for vehicles one to three model years old.
(3) Twenty-six percent (26%) per annum for vehicles four to five model years old.
(4) Thirty percent (30%) per annum for vehicles six model years old and older.
A motor vehicle is one model year old on January 1 of the year following the designated year model of the vehicle.
(d) Notwithstanding subsections (b) and (c) of this section, in the event that the amount financed in a consumer credit sale contract is secured in whole or in part by a security interest in real property, the finance charge rate shall not exceed sixteen percent (16%) per annum.
(e) A seller shall not divide a single credit sale transaction into two or more sales to avoid the limitations as to maximum finance charges imposed by this section.
(f) Notwithstanding subsections (b) and (d) of this section, the parties to a consumer credit installment sale contract for the sale of a residential manufactured home that is secured by a first lien on that home or on the land on which the home is located may contract in writing for the payment of a finance charge as agreed upon by the parties. This subsection only applies if the parties are entitled to so contract by Section 501 of United States Public Law 96-221, and have complied with the regulations adopted under it.
For the purposes of this subsection, a “residential manufactured home” means a manufactured home as defined in N.C. Gen. Stat. § 143-145 that is used as a dwelling. (1971, c. 796, s. 1; 1979, 2nd Sess., c. 1330, ss. 1, 2; 1981, c. 446, ss. 1-3; 1983, c. 126, s. 2; 2021-159, s. 2(b); 2023-60, s. 1.)