NOTE, DISCLOSURE, AND SECURITY AGREEMENT

Transcription

1 FORM 5F.5 CONSUMER COMBINATION DISCLOSURE, NOTE, AND SECURITY AGREEMENT (FIXED INTEREST RATE) Comments: This form will work for motor vehicles and boats. The brackets indicate variable language to be inserted in the form depending on the transaction {variable language}. NOTE, DISCLOSURE, AND SECURITY AGREEMENT Borrower(s): TIN/SSN # Lender: LOAN # ANNUAL PERCENTAGE RATE The cost of my credit as a yearly rate. % FINANCE CHARGE The dollar amount the credit will cost me. AMOUNT FINANCED The amount of credit provided to me or on my behalf. TOTAL PAYMENTS The amount I will have paid after I have made all payment as scheduled. Payment Schedule: Number of Payments Amount of Payments When Payments Are Due Required Deposit: The annual percentage rate does not take into account any required deposit. Variable-Rate Feature: Your loan contains a variable-rate feature (Complete 1 or 2, as applicable.) 1. Disclosures about the variable-rate feature have been provided to you earlier. 2. a. The annual percentage rate may increase during the term of this transaction if: The index used by the Lender to determine your interest rate increases. The index used with your loan is: Lender s prime rate Other Any increase in the interest rate is within the Lender s discretion. The balance of my deposit account falls below. I terminate my employment with. b. The rate during the term of your loan will not increase above %. c. The maximum rate increase at one time will be %. d. Your rate will not increase more than once every. e. Any increase will take the form of: higher payment amounts more payments of the same amount a larger amount due at maturity Security: I am giving a security interest in: The goods or property being purchased (brief description of other property) Collateral securing other loans with Lender may also secure this loan. Late Charge: If a payment is days late, you will be charged % of the payment, or, whichever is greater less. Prepayment: If you pay off early, you may will not have to pay a penalty minimum finance charge. Insurance: You may obtain property insurance from anyone you want that is acceptable to the Lender. If you obtain it from the Lender, you will pay for the term of. I will look at my contract documents for any additional information about nonpayment, default, any required repayment in full before the scheduled date, and prepayment refunds and penalties.

2 e means an estimate Insurance: Credit life insurance, credit accident and health insurance, and involuntary unemployment insurance are not required to obtain credit, and will not be provided unless you agree to pay the additional cost. Type Premium Term Signature(s) Credit Life I want credit life insurance Credit Accident and I want credit accident and health insurance Health Involuntary I want involuntary unemployment insurance Unemployment Example of Variable Rate based on the specific transaction: If the interest rate increased by % in. My regular payments will increase to. I will have to make additional payments. My final payment will increase to. Example of Variable Rate based on typical transaction: If my loan were for at % for and the rate increased to % in. My regular payments will increase to. I will have to make additional payments. My final payment will increase to. Amount Financed Itemization Amount Paid to Me Directly: Deposited to Account Lenders Check # Amount Paid to Others on My Behalf: paid to paid to Other Charges Financed: {description} {description} Total Financed Prepaid Finance Charges: Note Principal: Prepaid Finance Charges: Financed:

3 Financed: Amount Financed: Other Charges Paid in Full: Principal Amount: Note Date: PROMISE TO PAY. I promise to pay the Lender named above, whose address is listed above ( Lender ), or order, in lawful money of the United States of America, the principal amount of (_), together with interest at the rate of % per annum on the unpaid principal balance from, until paid in full. {Fixed Interest Rate paragraph} FIXED INTEREST RATE. The interest rate on this Note will be fixed at a rate of percent per annum. Interest on this Note is computed on a 365/ /360 simple interest basis; that is, by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. {Fixed Interest Rate payment paragraph} PAYMENT. I will pay this loan {{Demand clause} on demand, or if no demand is made,} in payments of each payment. My first payment is due,, and all subsequent payments are due on the same day of each month after that. My final payment will be due on,, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. I will pay Lender at Lender s address shown above or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and any late charges, then to any unpaid interest, and any remaining amount to principal.} {Variable Interest Rate paragraph} VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index a prime rate which is the (the Index ). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to me. Lender will tell me the current Index rate upon my request. I understand that Lender may make loans based on other rates as well. The interest rate change will not occur more often than. The Index currently is % per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of % percentage points over under the Index, adjusted if necessary for the minimum and maximum rate limitations described below, resulting in an initial rate of % per annum. Notwithstanding any other provision of this Note, the variable interest rate or rates provided for in this Note will be subject to the following minimum and maximum rates. NOTICE: Under no circumstances will the interest rate on this Note be less than % per annum or more than the lesser of % per annum or the maximum rate allowed by applicable law. Notwithstanding the above provisions, the maximum increase or decrease in the interest rate at any one time on this loan will not exceed percentage points. Unless waived by Lender, any increase in the interest rate will result in: larger payments, more payments, or a larger final payment. {Variable Interest Rate payment paragraph} PAYMENT. Subject to any payment changes resulting from changes in the Index, I will pay this loan {{Demand clause} on demand, or if no demand is made,} in payments of _ each payment. My first payment is due,, and all subsequent payments are due on the same day of each month after that. My final payment will be due on,, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Interest on this Note is computed on a 365/ /360 simple interest basis; that is, by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. I will pay Lender at Lender s address shown above or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and any late charges, then to any unpaid interest, and any remaining amount to principal. Unless waived by Lender, any increase in the interest rate will result in: larger payments, more payments, or a larger final payment.} LATE CHARGE. If a payment is days or more late, I will be charged % of the regularly scheduled payment or, whichever is less. DISHONORED ITEM FEE. I will pay a fee to Lender of if I make a payment on my loan and the check or preauthorized charge with which I pay is later dishonored.

4 DEFINITIONS. When the following words are used in this Agreement, I understand they will have the following meanings: Obligation. The word Obligation means the obligation evidenced by this Agreement, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for this Agreement, including all principal and interest, all other amounts, costs and expenses for which I am responsible under this Agreement or under any other agreement with Lender pertaining to the loan. Property. The word Property means the following described property which I am giving to Lender as security for the payment of the Obligation and performance of all my other obligations under this Agreement: {Collateral Description} The word Property also includes all accessions, attachments, accessories, replacements, and additions to the property described above (such as tires or batteries attached to a car, a motor attached to a boat, or appliances and fixtures attached to a mobile home), whether added now or later, together with all proceeds (including insurance proceeds and refunds of insurance premiums), if any, and sums due from a third party who has damaged or destroyed the Property or from their insurer, whether due to judgment, settlement, or other process. Despite any other provision of this Agreement, Lender is not granted, and will not have, a nonpurchase money security interest in household goods, to the extent such a security interest would be prohibited by applicable law. In addition, if because of the type of any Property, Lender is required to give a notice of the right to cancel under truth in lending for the Obligation, then Lender will not have a security interest in such Property unless and until such a notice is given. GRANT OF SECURITY INTEREST. To secure payment of the Obligation and performance of my other obligations under this Agreement, I grant to Lender a security interest in all the Property described above. I understand that the following statements set forth my responsibilities, as well as Lender s rights, concerning the Property. I agree, represent, and warrant as follows: (a) I am the lawful owner of the Property. The Property is free and clear of all loans, liens, security interests, mortgages, claims, and encumbrances except for those I have disclosed to Lender in writing prior to my signing this Agreement. I agree to defend Lender s rights in the Property against the claims and demands of all persons. I will not allow any other liens on the Property, even if they are junior to Lender s lien; (b) Without Lender s prior written consent, I will not sell, lease, transfer, borrow against, or otherwise dispose of any of my rights in the Property unless and until all the Obligation is paid in full; (c) Except for vehicles, I agree to keep the Property at my address shown above, unless Lender tells me I can move it. If the Property is a vehicle, I will keep it at that address except for routine travel. I will not move the vehicle to any other residence, nor will I take the vehicle to another state, except for routine travel. I will not do anything that requires applying for a certificate of title for the vehicle in another state without Lender s prior written consent; (d) I will keep the Property in good condition and repair. If the Property is damaged, lost, or stolen, I immediately will inform Lender. I will keep the Property fully insured against all loss or damage by fire, theft, collision, and such other hazards as Lender may require from time to time. The insurance will be on terms, including deductible provisions and endorsements, that are satisfactory to Lender, including stipulations that coverages will not be canceled or diminished without at least ten (10) days prior written notice to Lender and not including any disclaimer of the insurer s liability for failure to give such notice. I understand I may obtain insurance from any insurance company I may choose that is acceptable to Lender. I will provide Lender with the original insurance policy, or other proof satisfactory to Lender of the insurance coverage, together with all endorsements required by Lender, including an endorsement naming Lender as the party to whom all losses will be paid; and (e) I authorize Lender to inspect or examine the Property, wherever located, at any reasonable time, and I will aid Lender in making any such inspection. LENDER S EXPENDITURES. If I fail (a) to keep the Property free of all taxes, liens, security interests, encumbrances, and other claims, (b) to provide required insurance, or (c) to make repairs to the Property, Lender may do so. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged under this Agreement from the date incurred or paid by Lender to the date of repayment by me. All such expenses will become a part of the Obligation and, at Lender s option, will (a) be payable on demand, (b) be added to the balance of the loan covered by this Agreement and be apportioned among and be payable with any installment payments to become due during either (i) the term of any applicable insurance policy or (ii) the remaining term of this Agreement, or (c) be treated as a balloon payment which will be due and payable at the maturity of this Agreement. The Property also will secure payment of these amounts. DEFAULT. I will be in default if any of the following happens: (a) I fail to make any payment when due; (b) I break any promise I have made to Lender, or I fail to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note or any agreement related to this Note, or in any other agreement or loan I have with Lender; (c) Any representation or statement made or furnished to Lender by me or on my behalf is false or misleading in any material respect either now or at the time made or furnished; (d) I die or become insolvent, a receiver is appointed for any part of my property, I make an assignment for the benefit of creditors, or any proceeding is commenced either by me or against me under any bankruptcy or insolvency laws; (e) Any creditor tries to take any of my property on or in which Lender has a lien or security interest. This includes a garnishment of any of my accounts with Lender; or (f) Any of the events described in this default section occurs with respect to any guarantor of this Note. If any default, other than a default in payment, is curable and if I have not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) if I, after receiving written notice from Lender demanding cure of such default: (a) cure the default within thirty (30) days; or (b) if the cure requires more than thirty (30) days, immediately initiate steps which Lender deems in Lender s sole discretion to be

5 sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. ADDITIONAL REMEDIES. I may keep and use the Property so long as I am not in default under this Agreement. If I am in default, this is what Lender may do, in addition to the rights stated above and any other rights Lender may have: (a) Lender will have all the rights of a secured party under the Uniform Commercial Code and other applicable law. This means, among other rights, that Lender may enter upon the premises at the address shown above and take the Property peaceably and sell it. Lender may also, to the extent permitted by law, enter peaceably upon other premises for the purpose of retaking the Property, and I consent to such entry. If the Property contains any goods not covered by this Agreement at the time of repossession, I agree that Lender may take such goods, provided that Lender makes reasonable efforts to return them to me after repossession. If Lender asks me to do so, I will gather the Property and make it available to Lender at a place reasonably convenient to both Lender and me; (b) If Lender sells the Property, Lender will apply the net proceeds of the sale to reduce the amount owed Lender. Net proceeds means the sale price less the expenses of repossession, repair, sale, and as provided above, attorneys fees and other collection expenses. I agree that, to the extent permitted by law, I will owe Lender any difference between the amount of the Obligation and the net proceeds Lender receives from the sale of the Property; or (c) Unless the Property threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give me reasonable notice of the time and place of any public sale or of the date after which any private sale or any other intended disposition of the Property is to be made. The requirements of reasonable notice shall be met if such notice is given at least ( ) days before the time of the sale or disposition. LENDER S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, without notice, and then I will pay that amount. {{Post Maturity Rate} Upon default, including failure to pay upon final maturity, Lender, at its option, may also, if permitted under applicable law, increase the interest rate on this Agreement to % per annum}. The interest rate will not exceed the maximum rate permitted by applicable law. Lender may hire or pay someone else to help collect this Note if I do not pay. I also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender s attorneys fees and Lender s legal expenses whether or not there is a lawsuit, including attorneys fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. If not prohibited by applicable law, I also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by and interpreted in accordance with federal law and the laws of the Lender s state (Lender s state is set forth in the Lender s address shown at the beginning of this form), except and only to the extent of procedural matters related to the perfection and enforcement of Lender s rights and remedies against the Property, which matters shall be governed by the laws of the Borrower s state. However, in the event that the enforceability or validity of any provision of this Agreement is challenged or questioned, such provision shall be governed by whichever applicable state or federal law would uphold or enforce such challenged or questioned provision. CONTINUATION OF RIGHTS. If I make a partial or late payment or mark a payment Paid in Full and it is accepted, the Lender will have its legal rights concerning my repayment of this Note or any other note. I will remain obligated to repay this Note or any other note that replaces it, even if any other party to this Note is not obligated. Any legal rights that the Lender has will not be given up even if the rights are not used immediately. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. I and any other person who signs, guarantees, or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker, or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan, or release any party or guarantor or collateral; or impair, fail to realize upon, or perfect Lender s security interest in the collateral. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. PRIOR TO SIGNING THIS NOTE, I READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE {Variable Interest Rate}, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. I AGREE TO THE TERMS OF THE NOTE AND ACKNOWLEDGE RECEIPT OF A COMPLETED COPY OF THE NOTE. BORROWER X X Print Name Print Name Date Date