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Credit Contracts and Consumer Finance Act 2003

Consumer credit contracts - Payments - Prepayments

49: Part prepayments

You could also call this:

"Paying off part of a loan early"

Illustration for Credit Contracts and Consumer Finance Act 2003

You can make a part prepayment on a consumer credit contract. The creditor must accept your part prepayment unless the contract says they can decline it. If the contract says they can decline it, the creditor must decide quickly whether to accept it. If the creditor does not accept your part prepayment, they must refund it to you quickly. If they do accept it, they must credit it according to section 46. This means they must follow the rules in section 46 when crediting your part prepayment. You are protected when making part prepayments on consumer credit contracts. The creditor has rules to follow when you make a part prepayment. They must follow these rules to ensure you are treated fairly.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM213101.

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Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loans
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"Getting back money you didn't owe"

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50: Debtor's right to full prepayment, or

"Paying off your debt in full at any time"

Part 2Consumer credit contracts
Payments: Prepayments

49Part prepayments

  1. A creditor must accept any part prepayment under a consumer credit contract from a debtor unless the contract expressly permits the creditor to decline to accept the part prepayment.

  2. If the consumer credit contract expressly permits the creditor to decline to accept the part prepayment, the creditor must decide whether or not to accept the part prepayment as soon as practicable after receipt of the payment.

  3. If the creditor does not accept any part prepayment, the part prepayment must be refunded to the debtor as soon as practicable.

  4. If the creditor does accept any part prepayment, the part prepayment must be credited in accordance with section 46.