Wisconsin prepayment penalty rules

Wisconsin permits prepayment penalties on covered loans (as defined in the Wisconsin Consumer Act) only for fixed-rate loans exceeding $25,000. The penalty is allowed solely within the first 36 months after consummation and is capped at 60 days' interest at the contract rate on the amount prepaid, provided the borrower prepays more than 20% of the original loan amount within that 36-month period. Lenders must offer borrowers a choice between a loan with and without a prepayment penalty. No prepayment penalty is permitted on fixed-rate loans of $25,000 or less, on adjustable-rate loans, or on other fixed-rate loans not meeting the criteria. Additionally, no penalty may be imposed if the prepayment occurs in connection with a refinancing by the same lender. Note that these restrictions apply only to non-depository lenders; depository institutions are exempt under Wis. Stat. § 428.211.