NJ Prepayment Penalty

[EMAN]

What is the name of your state? New Jersey

Can anyone give me a good explination why most lenders cannot charge a prepayment penalty in New Jersey and others can? What allows them too?

Im asking because I was trying to help a family member get out of a bad loan, but we found out they had a penalty recently. The penalty is large enough to make the deal not worth doing until the penalty period is over in a few months. I previously was told that they could not charge one in NJ.

I just want to understand why, and the brokers ive spoken with dont know exactly why either. Maybe someone here could help me understand.

Thank You for any help

[seniorjudge]

Originally Posted by EMAN

What is the name of your state? New Jersey

Can anyone give me a good explination why most lenders cannot charge a prepayment penalty in New Jersey and others can? What allows them too?

Im asking because I was trying to help a family member get out of a bad loan, but we found out they had a penalty recently. The penalty is large enough to make the deal not worth doing until the penalty period is over in a few months. I previously was told that they could not charge one in NJ.

I just want to understand why, and the brokers ive spoken with dont know exactly why either. Maybe someone here could help me understand.

Thank You for any help

Q: I just want to understand why, and the brokers ive spoken with dont know exactly why either. Maybe someone here could help me understand.


A: $

[efflandt]

It is not necessarily that some lenders can't charge a prepayment penalty. It is just that those of us who pay attention to details and have good credit would not accept a loan with prepayment penalty (we can always go elsewhere). But some borrowers fail to read the fine print (clueless), or have limited loan choices due to their credit history.

A broker who wants your money may be the least likely person to tell you why or how to get out of it.