But it is legal in 36 states, or nearly 75% of the countryIn many states a prepayment penalty is illegal
https://www.carsdirect.com/auto-loans/understanding-car-loan-prepayment-penalties
These penalties are allowed in 36 states, although they are prohibited around the U.S. for loans longer than 61 months (over 5 years). These penalties must be disclosed in the loan documents, per Truth In Lending practices, so read your loan documents carefully.
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