What requirement does Minnesota law impose if a loan includes a prepayment penalty?

In Minnesota, the law mandates that if a loan includes a prepayment penalty, the borrower must complete homebuyer education before closing. This requirement is designed to ensure that borrowers are fully informed about the terms of their loan, including potential costs associated with early repayment. Homebuyer education programs typically cover important consumer topics such as budgeting, understanding loan terms, and the implications of financial decisions. This knowledge empowers borrowers to make informed choices and helps prevent financial hardship that could arise from misunderstanding the impact of a prepayment penalty.

The other options do not reflect the specific legal requirements related to loans with prepayment penalties in Minnesota. Collateral, debt payoffs, and co-signers are not relevant to this particular regulation concerning prepayment penalties. Hence, the focus on mandated homebuyer education serves to protect consumers by enhancing their understanding of significant loan features.