Can a bank charge interest after total loss?

Asked about 1 year ago - Framingham, MA

my bank is charging me interest on my total loss which happened 5/5/2013 firts was $4 a day and after my car insurance paid (12500) them most of my loan (my loan is 13500) it is $1 a day. can they charge me interest like that???

Attorney answers (2)

  1. Travis J. Jacobs

    Pro

    Contributor Level 12

    1

    Lawyer agrees

    Answered . I believe you posted a more detailed version of this question as well, correct? If so, first, yes the bank can continue to charge you interest until the full loan amount is paid off. But what I find interesting is the issue youre having with the gap coverage. The gap coverage should pay the difference between what you get for the total loss and the balance left on your car loan. Is the gap insurer refusing to pay that amount? Are they unreasonably delaying? - it sounds like they are, and that's why youre being charged this interest. But depending on the terms of the gap coverage, I would think that the gap insurer is also on the hook for the interest charged too - since it's all part of the loan balance. It's possible the gap insurance contract states that so you should review the contract or have an attorney do so for you.

    This response is not to be considered legal advice by anyone. This communication, alone, does not create an... more
  2. Alan James Brinkmeier

    Contributor Level 20

    Answered . Yes

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