N.J. Stat. § 17:16C-40.1
A sales finance company licensed under the provisions of the "Retail Installment Sales Act" of 1960 (P.L. 1960, c. 40), as amended and supplemented, or any act replacing or succeeding thereto which regulates "retail installment sales," may loan to any one person any sum of money up to a maximum of $10,000.00 secured by a purchase money security interest to finance the purchase of a passenger motor vehicle not intended to be used for the transportation of passengers for hire or upon a contract basis. The principal amount of such loan may be repaid in not more than 48 substantially equal monthly installments. Notwithstanding the provisions of R.S. 31:1-1 or any other law to the contrary, the sales finance company may charge interest at a rate or rates agreed to by the sales finance company and the borrower. Such interest shall be computed on the full amount of such loan for the period from the making of the loan to the date of maturity of the final installment, and shall be added to the principal amount of the loan. For the purpose of this act, a purchase money security interest is hereby defined to be a security interest taken by a sales finance company, pursuant to the provisions of chapter 9 of Title 12A of the New Jersey Statutes, in connection with and as security for an advance of money on behalf of a retail buyer of a motor vehicle of the motor vehicle dealer in payment of the unpaid balance of the cash price.
Effective on the first day of the twelfth month following the effective date of this act, when the unpaid balance owing upon a precomputed loan is repaid in full or the maturity of the unpaid balance of such loan is accelerated before the date scheduled for the payment of the final installment, the association shall allow a credit on account of the precomputed interest, calculated according to the actuarial refund method, as if all payments were made as scheduled, or if deferred, as deferred; provided, however, that if the loan is prepaid within 12 months after the first payment is due, an association may charge a prepayment penalty of not more than (a) $20.00 on any loan up to and including $2,000.00; (b) an amount equal to 1% of the loan on any loan greater than $2,000.00 and up to and including $5,000.00; and (c) $100.00 on any loan exceeding $5,000.00.
N.J.S. § 17:16C-40.1