OAR 441-735-0310: Refund of Unearned Interest and Charges

(1) If a borrower pays off a loan prior to the due date, the licensee must refund all unearned interest and charges. (2) For purposes of this rule, a licensee must calculate earned interest and charges by multiplying the loan amount by the interest rate and dividing by 365 to find daily interest then multiply that quotient by the number of days from the date the loan was made to the date of pay-off counting the day after the loan was made as the first day. Example: A borrower gets a loan of $200 on the 5th day of the month at 36 percent interest and comes on the 25th of the month to pay off the loan. The interest is calculated as follows: $200 x 0.36 = $72 divided by 365 = $0.20 per day x 20 days = $4.00 interest. If the borrower gave a lender a check on the 5th for the full 31-day term ($206.12), the lender must refund the unearned interest of $2.12. There is no minimum interest amount.