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- Alaska Statutes.
- Title 6. Banks and Financial Institutions
- Chapter 20. Alaska Small Loans Act
- Section 250. Payments and Interest.
previous: Section 240
. Loans For Purpose of Obtaining Higher Interest.
next: Section 260
. Charges Prohibited.
AS 06.20.250. Payments and Interest.
- (a) Interest may not be paid, deducted, or received in advance. Except for open-end loans made under AS 06.20.285
, interest shall be computed and paid only on unpaid principal balances and may not be compounded; however, if part or
all of the consideration for a loan contract is the unpaid principal balance of a prior loan, the principal amount
payable under the loan contract may include any unpaid charges on the prior loan that have accrued within 60 days
before the making of the loan contract. The maximum interest permitted on loans made under this chapter shall be
computed on the basis of the number of days actually elapsed. For the purpose of these computations a month is any
period of 30 consecutive days.
- (b) A licensee may compute interest for a loan as provided in this chapter on an interest-bearing or actuarial basis
either at the rates stated in AS 06.20.230
or at the single annual percentage rate that would earn the same finance charge as the rates stated in AS 06.20.230
when the debt is paid according to the agreed terms and the calculations made according to the actuarial method.
- (c) Except for open-end loans under AS 06.20.285
, a licensee may not enter into a contract for a loan that provides for a scheduled repayment of principal over more
than the maximum terms set out below opposite the respective size of loans.
Principal amount of loan Maximum term
up to $1,000 ............................... 24 and 1/2 months
Over $1,000 to $2,500 ...................... 48 and 1/2 months
Over $2,500 to $5,000 ...................... 60 and 1/2 months
Over $5,000 to $25,000 ..................... as agreed to by the
- (d) Loan contracts must provide for substantially equal payments, and the payments must be due at least once a month, with
the first payment beginning not later than 45 days from the date the loan is made.
- (e) If the irregular payment is confirmed in writing by the borrower, and the method of repayment is consistent with the
maximum term and annual interest rate provided in this chapter, and if a borrower demonstrates sufficient seasonal or
extraordinary income to support repayment of a loan, the loan contract may provide for irregular payments and first
payment extensions greater than 45 days from the date the loan is made.
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