Consumer Credit Regulation: 5.8.6.1 Fixing the Date for the Rebate Calculation
That the size of a rebate depends on the time when the debt is prepaid or otherwise matured makes intuitive sense. If a borrower pays off a two-year loan after only one month, the creditor has earned less interest and should have to refund more money than if the consumer paid off the same loan after twenty-two months. The reason is that the borrower who prepays early in the term of the loan has had the use of the borrowed principal for less time than the borrower who prepays near the end of the term of the loan.