Loan prepayment without changing duration?

[Monette Lowry]

Hello,

I have a question about a loan prepayment. I borrowed money from a family member. Since it was a large sum and we did not want to pay gift tax, we did it as a loan using the IRS interest rate that was effective at the time of borrowing. I have been making regular payments on the loan. I would like to make a prepayment, however I do not want to decrease the duration of the loan, instead I want the loan to essentially recalculate thus reducing my monthly payments because I've paid down some of the principal. I do not want to refinance, and I do not want to have to use a different interest rate. In the original loan document me and my family constructed we mentioned that this prepayment would occur and that loan would recalculate when it happened. So I am hoping that we can just go ahead and do this prepayment. I just want to make sure this all seems correct, and we will not have any issues with the IRS in doing so. Thank you for your advise.