(a) Except as limited by statutory provisions expressly applicable thereto, the privilege of prepayment of a loan, in whole or in part, and any refunds or premiums with respect thereto, shall be governed by contract between the parties.
Terms Used In Tennessee Code 47-14-108
Contract: A legal written agreement that becomes binding when signed.
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC
(b)(1) Any contract for a consumer loan that:
(A) Either prohibits prepayment or imposes a penalty for prepayment; and(B) Is not subject to the federal Truth in Lending Act, compiled in 15 U.S.C. § 1601 et seq. and its implementing Regulation Z, compiled in 12 CFR 226 et seq. shall state on its face in at least ten (10) point bold type in language separated from the other language in the contract by bold print dividing lines that it cannot be prepaid or that there is a penalty for prepayment.(2) If such contract does not comply with subdivision (b)(1), the provision prohibiting prepayment or imposing the prepayment penalty shall be unenforceable.(3) For purposes of this subsection (b), “consumer loan” means an extension of credit:
(A) To one (1) or more natural persons;(B) Primarily for personal, family or household purposes; and(C) Secured by real property or secured by personal property used or expected to be used as the principal dwelling of the consumer.
