Cost of Borrowing (Banks) Regulations

17 (1) This section applies to loans for fixed amounts of credit, except mortgage or hypothec loans.

(2) A borrower under a credit agreement may prepay

• (a) the outstanding balance of a credit agreement, at any time, without incurring any charge or penalty for making the prepayment; or

• (b) a part of the outstanding balance

  • (i) on the date of any scheduled payment, if payments are scheduled once a month or more often, or

  • (ii) at any time but only once a month, in any other case.

(3) A borrower under a credit agreement who prepays

• (a) the outstanding balance must be refunded or credited with the proportional amount of any non-interest charges, except for disbursement charges, paid by the borrower or added to that balance, calculated in accordance with the formula set out in subsection (4); and

• (b) a part of the outstanding balance is not entitled to a refund or credit related to non-interest charges mentioned in paragraph (a).

(4) The proportion of non-interest charges to be refunded or credited to a borrower shall be determined in accordance with the formula