§ 6.1-330.89. Acceleration clause in note evidencing installment loan; effect of acceleration
Any note or other contract evidencing an installment loan or other installment sales obligation with add-on interest may provide that the entire unpaid loan balance, at the option of the holder, shall become due and payable upon default in payment of any installment without impairing the negotiability of the note, if otherwise negotiable. Upon such acceleration, the holder of the contract of indebtedness shall not be entitled to judgment for unearned interest, but the balance owing shall be computed as if the borrower had made a voluntary prepayment and obtained as of the date of acceleration an interest credit based upon the Rule of 78 as defined in § 6.1-330.86 on a loan with an initial maturity and corresponding amortization period of sixty-one months or less payable in equal periodic installments, and on other loans under a method at least as favorable to the borrower as the actuarial method. Such accelerated balance shall bear interest at the rate shown, or which should have been shown if a consumer credit transaction were involved, as the annual percentage rate under a truth-in-lending disclosure pursuant to federal law.
(1987, c. 622; 1990, c. 338; 1991, cc. 171, 365.)
Sections: Previous 6.1-330.78:1 6.1-330.79 6.1-330.80 6.1-330.81 6.1-330.82 6.1-330.83 6.1-330.84 6.1-330.85 6.1-330.85:1 6.1-330.86 6.1-330.86:1 6.1-330.87 6.1-330.88 6.1-330.89 6.1-330.90 NextLast modified: April 16, 2009