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In Response To:
Thread Starter: rainman
Title: Re: Late Fee

Let me first say that I have no idea what state Anonymous was referring to. If it's Indiana law, then I'm sure you have a better understanding of how it is interpreted and applied than I do. I am responding solely to the language quoted in the original post (and like a lot of laws, it could certainly be drafted better): "For purposes of determining delinquency, payments are deemed to be applied first to current installments or other payments due and then to delinquent installments or other payments and then to delinquent and other charges."

There's no definition of what is a "current installment" but when I read the paragraph as a whole it seems to be saying that once the February payment is more than ten days past due, it is delinquent and a late fee can be assessed. If the borrower makes a payment after that (i.e. February 27) it has to be applied to the "current installment" which is now the one due in March; thus no late fee can be imposed for March.

I think the "within 10 days after its scheduled due date" language refers to the deadline for the payment to avoid a late fee, rather than saying a payment is only applied to the current installment if it is made after the due date, but if paid before the due date can be applied to prior delinquent installments and another late fee can then be applied to the current installment.