Missouri Revised Statutes

Mo. Rev. Stat. § 408.170 (2026)

Contracts paid in full before due date

✓ current as of May 2026

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408.170. Contracts paid in full before due date — recomputations of interest — refund defined. — 1. If a note or loan contract providing for amount of interest, added to the principal of the loan, is prepaid in full (by cash, renewal, or refinancing) one month or more before the final installment date, the lender shall either:

(1) Recompute the amount of interest earned to the date of prepayment in full on the basis of the rate of interest originally contracted for computed on the actual unpaid principal balances for the time actually outstanding; or

(2) If the initial term of the contract is sixty-one months or less and it is a contract for five thousand dollars or less, give a refund of a portion of the amount of interest originally contracted for which shall be computed as follows: The amount of the refund shall be at least as great a proportion of such amount of interest as the sum of the full monthly balances of the contract scheduled to follow the installment date after the date of prepayment in full bears to the sum of all the monthly balances of the contract, both sums to be determined according to the payment schedule provided by the contract; except that, if prepayment in full occurs during the first installment period, interest shall be recomputed and charged only for the actual number of days elapsed. When the period before the first installment is more or less than one month, the portion of the interest earned for such period shall be determined by counting each day in such period as one-thirtieth of a month and one three hundred and sixtieth of a year.

2. No refund shall be required for any partial prepayment.

3. For a contract for more than five thousand dollars, the word "refund" as used herein shall mean a credit or deduction from the amount of interest originally contracted for at any time by cash, renewal or refinancing, the buyer shall receive a refund which shall be calculated by the actuarial method. The lender shall retain no more interest than is actually earned whenever a note or loan contract is prepaid.

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(L. 1951 p. 875 § 408.032(f), A.L. 1986 H.B. 1207, A.L. 2002 S.B. 895)

Effective 7-01-03

Notes of Decisions

Cited in 3 cases (1 in the last 5 years), 1975–2022 · leading case: Beneficial Fin. Co. of St. Charles v. Kitson, 530 S.W.2d 497 (Mo. Ct. App. 1975).

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Beneficial Fin. Co. of St. Charles v. Kitson, 530 S.W.2d 497 (Mo. Ct. App. 1975). · cites it 4× “payment in advance in any amount at any time and specifies that if the note is “prepaid in full ” by cash, renewal or refinancing before the final due date, or the extended final due date, if any, the borrower shall receive a refund of a portion of the amount of interest…”

Gantt v. Commonwealth Loan Co., 416 F. Supp. 309 (E.D. Mo. 1976). · cites it 2× “Section 408.170, R.S.Mo. (1949). 15. This Court agrees with the Bone Court's analysis and rejection of the argument that use of the Rule of 78's is a prepayment penalty within the meaning of section 226.”

MM Fin., LLC, d/b/a EZ Money Check Cashing v. Andrea I. Rose (Mo. Ct. App. 2022). · cites it 4× “” And § 408.170 expressly provides that, upon prepayment, a lender is entitled to recover accrued interest based on the rate or amount “of interest originally contracted for.”

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