N.J. Admin. Code § 3:1-14.6
Current through Register Vol. 56, No. 23, December 2, 2024
Section 3:1-14.6 - Methods of computing interest(a) Interest may be computed in each billing cycle by any of the following methods, in accordance with the agreement between the bank, savings bank or savings and loan association and the borrower.1. By converting each yearly rate to a daily rate and multiplying such daily rate by the applicable portion of the daily unpaid principal balance of the account, in which case each daily rate is determined by dividing each yearly rate by 365; or2. By multiplying 1/12th of each yearly rate by the applicable portion of the average daily unpaid principal balance of the account in the billing cycle, in which case the average daily unpaid principal balance is the sum of the amount unpaid each day during the cycle divided by the number of days in the cycles; or3. By converting each yearly rate to a daily rate and multiplying such daily rate by the number of days in the billing cycle and then multiplying by the applicable portion of the average daily unpaid principal balance of the account in the billing cycle, in which case each daily rate is determined by dividing each yearly rate by 365, and the average daily unpaid principal balance is the sum of the amount unpaid each day during the cycle divided by the number of days in the cycle.(b) For all the methods of computation in (a)1-3 above, the billing cycle shall be monthly (except that a month may vary from 27 to 35 days) and the unpaid principal balance on any day shall be determined by addition to any balance unpaid as of the beginning of that day all advances, past due interest, and other permissible amounts charged to the borrower and deducting all payments and other credits made or received that day. N.J. Admin. Code § 3:1-14.6