N.J. Stat. § 17:12B-160
Notwithstanding the provisions of R.S. 31:1-1 or any other law to the contrary, the maximum charge which an association may contract for and receive on loans as defined in section 158 of P.L. 1963, c. 144 (C. 17:12B-158) shall not exceed an amount calculated according to the actuarial method at a rate or rates agreed to by the association and the borrower. The evidence of indebtedness may provide for an increase, or may provide for a decrease, or both, in the rate of interest applicable to the loan. 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 evidence of indebtedness 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 evidence of indebtedness. No rate increase shall take effect during the first 3 years of the term of the loan, 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 borrower that clearly and conspicuously describes such increase, and (b) unless at least 365 days have elapsed without any increase in the rate. 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. Where the evidence of indebtedness provides for an increase or decrease in the rate of interest, the provision of subsection (4) of section 159 of P.L. 1963, c. 144 (C. 17:12B-159(4)) requiring that the amount of any installment shall not be greater or less than any other installment shall not apply. If the evidence of indebtedness does provide that the interest rate may be increased then, notwithstanding the provisions of section 163 of P.L. 1963, c. 144 (C. 17:12B-163), 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. Effective on the first day of the twelfth month following the effective date of this act, notwithstanding the provisions of section 163 of P.L. 1963, c. 144 (C. 17:12B-163), 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. In the case of a precomputed loan, the interest may be computed on the assumption that all scheduled payments will be made when due, and all scheduled installment payments made on a precomputed loan may be applied as if they were received on their scheduled due dates. In the case of nonprecomputed loans, all installment payments shall be applied no later than the next day, other than a public holiday, after the date of receipt, and a day shall be counted as one three-hundred-sixty-fifth of a year.
N.J.S. § 17:12B-160