N.J. Stat. § 17:16C-41
A retail seller and a motor vehicle installment seller, under the provisions of this act, shall have authority to charge, contract for, receive or collect a time price differential as defined in this act, on any retail installment contract evidencing the sale of goods or services in an amount or amounts as agreed to by the retail seller or motor vehicle installment seller and the buyer on motor vehicles and on all other goods or services.
The retail installment contract may provide for an increase, or may provide for a decrease, or both, in the time price differential applicable to the contract. No increase during the entire loan term shall result in an interest rate of more than 6% per annum over the rate applicable initially, nor shall the rate be raised more than 3% per annum during any 12-month period. The lender shall not be obligated to decrease the interest rate more than 6% over the term of the loan, nor more than 3% per annum during any 12-month period. If a rate increase is applied to the loan, the lender shall also be obligated to adopt and implement uniform standards for decreasing the rate. If the contract provides for the possibility of an increase or decrease, or both, in the rate, that fact shall be clearly described in plain language, in at least 8-point bold face type on the face of the contract. No rate increase shall take effect during the first 3 years of the term of the contract, or thereafter, (a) unless at least 90 days prior to the effective date of the first such increase, or 30 days prior to the effective date of any subsequent increase, a written notice has been mailed or delivered to the retail buyer that clearly and conspicuously describes such increase, and (b) unless at least 365 days have elapsed without any increase. No increase during the entire contract term shall result in an interest rate of more than 6% per annum over the rate applicable initially, nor shall the rate be raised more than 3% per annum during any 12-month period.
If the retail installment contract does provide that the time price differential may be increased then, notwithstanding the provisions of section 43 of P.L. 1960, c. 40 (C. 17:16C-43), when the unpaid balance owing upon a contract is paid in full or the maturity of the unpaid balance of such contract is accelerated before the date scheduled for the payment of the final installment, the holder of the contract shall allow a credit on account of the precomputed time price differential 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 contract is prepaid within 12 months after the first payment is due, a holder may charge a prepayment penalty of not more than (a) $20.00 on any contract up to and including $2,000.00; (b) an amount equal to 1% of the loan on any contract greater than $2,000.00 and up to and including $5,000.00; and (c) $100.00 on any contract exceeding $5,000.00. Effective on the first day of the twelfth month following the effective date of this act, if the retail installment contract does provide for a time price differential, then, notwithstanding the provisions of section 43 of P.L. 1960, c. 40 (C. 17:16C-43), when the unpaid balance owing upon a contract is paid in full or the maturity of the unpaid balance of such contract is accelerated before the date scheduled for the payment of the final installment, the holder of the contract shall allow a credit on account of the precomputed time price differential 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 contract is prepaid within 12 months after the first payment is due, a holder may charge a prepayment penalty of not more than (a) $20.00 on any contract up to and including $2,000.00; (b) an amount equal to 1% of the loan on any contract greater than $2,000.00 and up to and including $5,000.00; and (c) $100.00 on any contract exceeding $5,000.00.
The time price differential shall be computed on the amount of the principal balance as determined in section 27(f), from the date of the contract to the due date of the final installment, notwithstanding the fact that the contract is to be repaid in installments.
If the time price differential so computed is less than $12.00, and if the due date of the last installment of the contract is more than 8 months after the date of the contract, a charge of not more than $12.00 may be made in lieu of the time price differential. If the time price differential so computed is less than $10.00, and if the due date of the last installment of the contract is 8 months or less after the date of contract, a charge of not more than $10.00 may be made in lieu of the time price differential.
N.J.S. § 17:16C-41