I read online that you are only allowed by Florida statutes to charge at most 27-30% APR. Are they legally allowed to charge as much as they are charging me? I'm sure I'm not the only one. I needed to get a car and was in a tight spot so I had no other choice. I got a $1,000 loan from them. I have paid them between $285-$300 every month since May and somehow I still owe them $1,287.87 even though I only received $1,000 from them. Granted I don't have the best credit but they do not go by that, they go by the shape of the car and the mileage that your getting the loan on. I just don't understand how they are charging this. Please if you could help me figure this out. I'm just asking this now because people are asking me why I am still paying on this and I'm wondering this myself.
Well, it depends. Does the loan contract state this is the APR? How did you calculate it? Does the loan require ('voluntarily') that you get insurance of various types in order to get the loan. You should contact an attorney who can help you with this matter. It sounds like they are doing something wrong but the documents would need to be reviewed.
I have added the lnk to Florida Statute 520.08, which governs APR financing. Florida also has usury laws for interest rates limiting the annual rate on notes, credit, and other similar financing, not to exceed 16%, but some attorneys argue that one can waive that limitation by contract. I am not sure whether that same argument could be made that one can waive same with regards to APR through applicable terms of an executed agreement.
However, the best course of action that you should consider is consulting with a local attorney, whom you should be able to find through Avvo.com, that can review your loan instrument to better advise you on whether or not there is a violation of statute or if the contract is otherwise unenforceable.
I agree with my colleague that based on the information you have provided, it would appear that there may be an issue with the contract. However, I wouldn't suggest -- and I do not believe any attorney would otherwise suggest -- that you stop paying in accordance with the agreement without first consulting an attorney who can properly advise you after reviewing the agreement.
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Under Florida law, it sounds as though the contract is usurious. But, Florida law may not govern the contract. Many contracts contain something known as a choice-of-law provision, which allows the laws of a different state to govern the terms of the contract. This is why many credit card companies are based out of South Dakota or Delaware. I would consult an attorney through Avvo that can review the consumer loan agreement and advise you on whether the contract is usurious or not.
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