- Alaska Statutes.
- Title 45. Trade and Commerce
- Chapter 10. Alaska Retail Installment Sales Act
- Section 70. Prepayment.
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AS 45.10.070. Prepayment.
- (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.
- (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
- (c) If the amount of refund credit is less than $1, no refund credit need be made.
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