496

LAWS OF MARYLAND

[Ch. 49

for and receive.

The only other changes are in style.

For additional provisions relating to

extensions and renewals by sales finance
companies, see Part III, §§ 12—632 et seq. of
this subtitle.

12-620. PREPAYMENT.

(A)   BUYER'S RIGHT TO PREPAY.

NOTWITHSTANDING ANY PROVISION OF AN INSTALLMENT SALE
AGREEMENT TO THE CONTRARY, A BUYER MAY PREPAY AT ANY
TIME, WITHOUT PENALTY, ALL OR ANY PART OF THE UNPAID TIME
BALANCE PAYABLE UNDER THE INSTALLMENT SALE AGREEMENT.

(B)   REFUND OF FINANCE CHARGE.

(1)    EXCEPT AS PROVIDED IN PARAGRAPH (2) OF
THIS SUBSECTION, IF THE BUYER PAYS THE TIME BALANCE IN
FULL BEFORE MATURITY, THE HOLDER IMMEDIATELY SHALL REFUND
TO HIM A PORTION OF THE FINANCE CHARGE. THE AMOUNT OF
THE REFUND SHALL BE CALCULATED BY ONE OF THE FOLLOWING
METHODS:

(i) THE AMOUNT OF THE REFUND SHALL BE
CALCULATED ACCORDING TO THE "RULE OF 78"; THAT IS, THE
REFUND SHALL REPRESENT AT LEAST AS GREAT A PROPORTION OF
THE TOTAL FINANCE CHARGE AS THE SUM OF THE PERIODIC TIME
BALANCES AFTER THE DATE OF PREPAYMENT BEARS TO THE SUM OF
ALL THE PERIODIC TIME BALANCES UNDER THE SCHEDULE OF
PAYMENTS IN THE ORIGINAL AGREEMENT; OR

(ii) THE AMOUNT OF THE FINANCE CHARGE SHALL
BE DIVIDED BY THE NUMBER OF MONTHS ORIGINALLY PROVIDED
FOR THE PAYMENT OF THE TIME BALANCE UNDER THE AGREEMENT
AND THE QUOTIENT SHALL BE MULTIPLIED BY THE NUMBER OF
MONTHS BY WHICH THE PAYMENT OF THE TIME BALANCE IS
PREPAID BY THE BUYER.

(2)     IF THE AMOUNT OF THE CREDIT FOR
PREPAYMENT IS LESS THAN $1, NO REFUND NEED BE MADE.

REVISOR'S NOTE: This section presently appears as
Art. 83, §138.

In subsection (a) of this section, the words
"without penalty" are added for clarity and to
conform to the usage elsewhere in this
subtitle.

In subsection (b) (1) (i) of this section, the