In Ridgley v. Topa Thrift & Loan Assn. (1998) 17 Cal.4th 970, the California Supreme Court found an invalid penalty resulted from a provision that the borrower owed the lender a prepayment fee at the time of sale only if the borrower had been more than 15 days late with any scheduled interest payment. The court looked to the substance of the provision at issue rather than its form and held that the provision was a disguised penalty because the fee was unrelated to the purported function of the charge as compensation for prepayment. (Id. at p. 981.) "The charge provision is, instead, plainly intended as an incentive for prompt payment of interest." (Ibid.)