2023 Code of Virginia › Title 6.2 - Financial Institutions and Services › Chapter 3 - Interest and Usury › § 6.2-311. Closed-end installment loans by sellers of goods or services

A. Any seller of goods or services who extends credit under a closed-end installment credit plan or arrangement may impose finance charges at such rate or rates as the seller and the purchaser have agreed. Deferrals and extensions of the time for payment, if allowed by a seller of goods or services who extends credit under a closed-end installment credit plan or his assignee, may be subject to a finance charge if agreed to in the original contract or at the time of the renewal or extension. No additional finance charge shall be made for the extension of credit under such a plan or arrangement. If the total finance charge on the transaction is precomputed according to the actuarial method, the finance charge shall be calculated on the assumption that all scheduled payments will be made when due. The balance on which such finance charge may be imposed may include the deferred portion of the sales price, costs and charges incidental to the transaction, including (i) any insurance premium financed in connection therewith and (ii) the amount actually paid or to be paid by the seller to discharge a security interest or lien on the property traded in. The payment by a lessor to discharge a security interest or lien on the property traded in may be included in the gross capitalized cost of the goods leased and, for purposes of this chapter and Chapter 6 (§ 55.1-600 et seq.) of Title 55.1, shall not constitute a loan.
B. The debtor shall have the right to prepay in full on precomputed transactions and receive a rebate of unearned finance charge determined in accordance with the Rule of 78, as illustrated in § 6.2-403, or other method elected by the seller under which the finance charge imposed does not exceed the amount that results from application of the Rule of 78 on extensions of credit with an initial maturity of 61 months or less. On extensions of credit with an initial maturity of more than 61 months, the debtor shall receive a rebate computed under a method at least as favorable to the debtor as the actuarial method. The seller may also condition such rebate upon receiving a minimum of $25 in finance charges. This amount, to the extent not earned, may be withheld from the rebate required hereunder.
C. In connection with such a credit plan, the seller may also:
1. Impose a late charge pursuant to § 6.2-400; and
2. Charge and collect a document fee as may be agreed upon by the seller and purchaser in connection with such credit plan. The document fee shall (i) be for the preparation, handling, and processing of documents relating to the goods or services and to the closing of the transaction and (ii) not be considered a finance charge for the purposes of this chapter.
D. Premiums for credit life insurance and credit accident and health insurance purchased by the debtor shall not be construed as an additional charge for the extension of credit if such insurance coverage is purchased voluntarily by the debtor. Premiums for property insurance on the goods purchased or leased, including vendor's single interest insurance on such goods, shall not be construed as additional charges for the extension of credit if a clear and conspicuous statement in writing is furnished by the seller or lessor to the buyer or lessee setting forth the cost of the insurance if obtained from or through the seller or lessor and stating that the buyer or lessee may choose the person through which the insurance is to be obtained.
1987, c. 622, § 6.1-330.77; 1988, c. 145; 1990, c. 338; 1999, cc. 62, 373; 2010, c. 794.