REFINANCING OF LARGE INSTALLMENT

(a) If a scheduled installment of a retail installment contract is more than an amount equal to twice the average of all installments scheduled before that installment, other than the down payment, the retail buyer is entitled to refinance that installment: (1) when the installment is due; (2) without an acquisition cost; (3) in installments that are not greater or more frequent than the average amount and frequency of installments preceding that installment; and (4) at a rate of time price differential that does not exceed the rate applicable to the original contract. (b) This section does not apply to: (1) a lease; (2) a retail installment transaction for a vehicle that is to be used primarily for a purpose other than personal, family, or household use; (3) a transaction for which the payment schedule is adjusted to the seasonal or irregular income or scheduled payments or obligations of the buyer; (4) a transaction of a type that the commissioner determines does not require the protection for the buyer provided by this section; or (5) a retail installment transaction in which: (A) the seller is a franchised dealer licensed under Chapter 2301, Occupations Code; and (B) the buyer is entitled, at the end of the term of the retail installment contract, to choose one of the following: (i) sell the vehicle back to the holder according to a written agreement: (a) entered into between the buyer and holder concurrently with or as a part of the transaction; and (b) under which the buyer will be released from liability or obligation for the final scheduled payment under the contract on compliance with the agreement; (ii) pay the final scheduled payment under the contract; or (iii) if the buyer is not in default under the contract, refinance the final scheduled payment with the holder for repayment in not fewer than 24 equal monthly installments or on other terms agreed to by the buyer and holder at the time of refinancing and at a rate of time price differential not to exceed the lesser of: (a) a rate equal to the maximum rate authorized under this subchapter; or (b) an annual percentage rate of five percent a year more than the annual percentage rate of the original contract. (c) A retail installment contract under Subsection (b)(5) must disclose that any refinancing may be for any period and payment schedule to which the buyer and holder agree.