Loans Terms

For the purpose of this act, an amortized loan shall be one which provides for payments to be made on the principal in installments to be paid at regular intervals at least semiannually and to commence not later than one year after the date of the loan. Such installments may include interest and either as to principal alone or as to combined principal and interest shall be at least of a sufficient amount so that the smallest installment provided in the note evidencing said loan (other, than the last COL120106 CH. 130 INVESTMENTS, LOANS AND BORROWING installment) if continued at such regular intervals would result in paying the entire principal in not more than 20 years (or, in the case of loans pursuant to Section 130120 or 130121, within 25 years) from the due date of the first installment, whether or not such loan be written for a shorter period. Such loans may provide for payment of interest or principal or both, in addition to such regular installments and in the event such regular installments are not sufficient to pay the entire principal within the term thereof, such loans must provide that the entire amount unpaid come due and payable within not more than 6 months after the due date of the last regular installment; provided, however, that the commissioner may by rules permit, and prescribe a longer maximum term than as herein provided in the case of amortized loans upon particular classes of security which classes he shall have power to prescribe and define. Loans may be made by an association which may or may not provide for payments on account of the principal thereof during an initial period not to exceed three years. If any loan does not provide for the payment, commencing not later than one year after the date thereof, of installments either of principal alone or of combined principal and interest at a rate at least equal to the rate hereinabove provided for an amortized loan, the same shall not be an amortized loan for the purpose of Section 130111 of this act; but for the purpose of Section 130115 of this act, any loan held by an association may be classified as an amortized loan during any period within which payments are being made, or within which the note or obligation representing such loan provides for payments to be made, of installments either of principal alone or combined principal and interest thereof at a rate not less than that hereinabove provided for an amortized loan. The provisions of this section are subject to the provisions of Section 130120 and of Section 130121.