No. Section 306.005 of the Texas Finance Code specifically excludes prepayment premiums from the definition of interest for the purpose of commercial loans in Texas. The full text of the provision reads as follows:
“§306.005. PREPAYMENT PREMIUMS AND SIMILAR AMOUNTS. With respect to a loan subject to this chapter, a creditor and an obligor may agree to a prepayment premium, make-whole premium, or similar fee or charge, whether payable in the event of voluntary prepayment, involuntary prepayment, acceleration of maturity, or other cause that involves premature termination of the loan, and those amounts do not constitute interest.”
Section 306.001(5) of the Texas Finance Code defines a “commercial loan” as “a loan that is made primarily for business, commercial, investment, agricultural, or similar purposes. The term does not include a loan made primarily for personal, family, or household use.”
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