(1) Each original title loan must have a term of 30 days.

(2) The loan agreement may provide for automatic 30-day renewal periods beyond the original term if principal and interest are not paid in full on the maturity date. Any automatic 30-day renewal period must be clearly stated on the face of the loan agreement in bold, capital letters. In addition to any other disclosures that may be required by law, licensees must provide the borrower, in the original title loan agreement or by addendum, a statement of the principal and interest due over a six-month period if the borrower fails to make any payments as set forth in Illustration A. Such statement must be initialed by the borrower at the time of the original loan and include the borrower's affirmation that the borrower has been shown and read the statement.

 

Illustration A

 

	Principal	Interest Per Month at 25%	Accrued Interest at 25%	Total Amount Due
Original Loan	$500.00	$125.00	$125.00	$625.00
Renewal 1	$500.00	$125.00	$250.00	$750.00
Renewal 2	$500.00	$125.00	$375.00	$875.00
Renewal 3	$500.00	$125.00	$500.00	$1,000.00
Renewal 4	$500.00	$125.00	$625.00	$1,125.00
Renewal 5	$500.00	$125.00	$750.00	$1,250.00

 

(3) On any loan containing an automatic 30-day renewal provision, at the time of each renewal licensees must provide, in person or by mail at the borrower's last known address, an updated truth in lending statement.

(4) Interest may not compound from one extension or renewal to another.

(5) A licensee shall not extend or grant any additional credit other than that which was granted in the original title loan agreement without first requiring full payment of all principal and interest due on the original title loan, or any subsequent extensions, and releasing the security interest in the titled property.

(6) Licensees may not issue a new original loan to pay off the previous original loan.