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Credit Contracts and Consumer Finance Act 2003

Consumer credit contracts - Payments - Prepayments

51: Amount required for full prepayment

You could also call this:

"Paying off your debt early: what you need to pay"

Illustration for Credit Contracts and Consumer Finance Act 2003

You want to pay off your consumer credit contract early. The amount you need to pay is the unpaid balance, plus some fees. The fees include a credit fee to cover the creditor's administrative costs and a fee to cover their loss. You only pay interest charges and other fees that have accrued up to the time of payment. The credit fee must be reasonable under section 41. The fee to cover the creditor's loss must be calculated in accordance with section 54. The amount you pay cannot be more than the sum of these, minus any amounts referred to in sections 52, 52A, and 52B.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM213103.

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Topics:
Money and consumer rights > Consumer protection
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50: Debtor's right to full prepayment, or

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Part 2Consumer credit contracts
Payments: Prepayments

51Amount required for full prepayment

  1. The amount required for the full prepayment of the consumer credit contract must be no more than the sum of the following, less the amount or amounts referred to in 1 or more of sections 52, 52A, and 52B (as applicable):

  2. the unpaid balance at the time of the full prepayment; and
    1. a credit fee to reasonably compensate the creditor for any administrative cost incurred by the creditor in relation to the full prepayment (being a credit fee that is not unreasonable under section 41); and
      1. a fee or charge that does not exceed a reasonable estimate of the creditor's loss arising from the full prepayment, as calculated in accordance with section 54.

        1. In calculating the unpaid balance, the creditor must only include interest charges and other fees and charges that have accrued or would ordinarily be payable under the consumer credit contract up to the time of the full prepayment.

        Notes
        • Section 51(1): replaced, on , by section 34 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).