Owner financed land

[landquestions]

Hi everyone, a response is greatly appreciated.

My wife and I will be buying land soon. The owner wants to owner-finance for 7.5% with annual payments and stretched out over twenty years. He doesn't want us to be able to pay it off early either. He wants one payment every year. I feel like were getting the shaft, if I have an extra $20,000 in the bank, I'm actually loosing 7.5% if I can't pay the land off quicker. The interest rate doesn't bother me, its not being able to lower the principal as fast as possible.

Is this legal in Arkansas?

Arkansas law states consumer and non-consumer rate is a maximum of 5% above the Federal Reserve discount rate. Consumer rate is capped at 17%. My Dad loaned a large some of money to a family member and was only able to loan at a rate of 5.5%, at least that is what the lawyer said. 5% plus the .5% fed rate.

My question is....does that law only apply to loans, and does our "deal" count as a purchase and have no relevance?