(a) A retail installment contract must contain a statement that the buyer may pay the total unpaid balance on the contract at any time. A buyer who prepays in full the unpaid balance at any time before its final due date shall, if the contract is not in default more than two months, receive a refund credit of the unearned portion of the service charge for the prepayment.
Terms Used In Alaska Statutes 45.10.070
buyer: means a person who buys or agrees to buy goods or obtain services or agrees to have services rendered or furnished from a retail seller. See Alaska Statutes 45.10.220
contract: means a contract, other than a retail charge agreement or an instrument reflecting a sale price made under a retail charge agreement, entered into or performed in the state for a retail installment transaction. See Alaska Statutes 45.10.220
Contract: A legal written agreement that becomes binding when signed.
goods: includes merchandise certificates or coupons issued by a retail seller to be used in their face amount instead of cash in exchange for goods or services sold by the seller and goods, including a manufactured home, that, at the time of sale or subsequently, are to be so affixed to real property as to become a part of it, whether or not severable from it. See Alaska Statutes 45.10.220
(b) Except when the service charge is computed on an add-on or simple interest basis, the amount of the refund credit shall be computed according to the “rule of 78ths”; that is, it shall represent at least as great a proportion of the original service charge over $25 in case of a retail installment sale of a motor vehicle, or $10 in case of a retail installment sales of goods other than a motor vehicle, as (1) the sum of the monthly or other periodic unpaid balances under the schedule of payments in the contract beginning as of the date after the prepayment that is the next succeeding monthly or other periodic anniversary date of the due date of the first installment under the contract, or, if the prepayment is before the due date of the first installment under the contract, then as of the date after the prepayment that is the next succeeding monthly or other periodic anniversary date of the date of the contract bears to (2) the sum of all the monthly or other periodic unpaid balances under the schedule of installment payments in the contract.(c) If the amount of refund credit is less than $1, no refund credit need be made.
