NC General Statutes

N.C. Gen. Stat. § 25A-32 (2026)

Rebates on prepayment

✓ current as of July 2026

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Notwithstanding any provision in a consumer credit installment sale contract to the contrary, any buyer may satisfy the debt in full at any time before maturity, and in so satisfying such debt, shall receive a rebate, the amount of which shall be computed under the "rule of 78's," as follows:

"The amount of such rebate shall represent as great a proportion of the finance charge (less a prepayment charge of ten percent (10%) of the unpaid balance, not to exceed twenty-five dollars ($25.00)) as the sum of the periodical time balances after the date of prepayment in full bears to the sum of all the periodical time balances under the schedule of payments in the original contract." No rebate is required if the amount thereof is less than one dollar ($1.00).

If the prepayment is made otherwise than on the due date of an installment, it shall be deemed to have been made on the installment due date nearest in time to the actual date of payment.

If a seller obtains a judgment on a debt arising out of a consumer credit installment sale or the seller repossesses the collateral securing the debt, the seller shall credit the buyer with a rebate as if the payment in full had been made on the date the judgment was obtained or 15 days after the repossession occurred. If the seller obtains a judgment and repossesses the collateral, the seller shall credit the buyer with a rebate as if payment in full had been made on the date of the judgment or 15 days after the repossession, whichever occurs earlier. (1971, c. 796, s. 1.)

Notes of Decisions

Cited in 3 cases (1 in the last 5 years), 1982–2022 · leading case: Steed v. First Union Nat'l Bank, 293 S.E.2d 217 (N.C. Ct. App. 1982).

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Steed v. First Union Nat'l Bank, 293 S.E.2d 217 (N.C. Ct. App. 1982). “In addition to remedies hereinbefore provided, the following remedies shall apply to consumer credit sales: (3) In the event the seller or an assignee of the seller (i) shall fail to make any rebate required by G.S. 25A-32 or G.S. 25A-36, (ii) shall charge and receive fees or…”

Hill v. Carvana, LLC (M.D.N.C. 2022). “Hill asserts that Carvana and Bridgecrest violated RISA in three separate ways: by failing to give him a rebate when he paid the loan back early as required by § 25A-32; by charging unauthorized fees in excess of those allowed under RISA, § 25A-44(3); and by failing to provide a…”

Schewel Furniture Co. v. Goard (In Re Goard), 26 B.R. 316 (Bankr. M.D.N.C. 1982). “25A-15, with the amount financed or consolidated, less the rebate provided by G.S. 25A-32. In computing the rebate to be credited to the previous time balances for purposes of this section, no prepayment charge shall be imposed.”

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