I got a title loan for $1,050.00. It was an 18 month loan with a $151.00 monthly payment. I have just paid my 11th payment which brings my total paid to $1,661.00. Before I made this payment my total paid was $1,510.00 and was informed that the payoff as of today was $806.48. Where as two months ago, before two payments of $151.00 each, the payoff was $909.17.
So the loan has only went down a little over $100.00 after paying over $300.00 since.
I was informed today before I made my payment that they charge a $3.12 interest every single day, regardless of the payment being made on time every single month.
They could not answer my question as to how am I supposed to get it paid off if they are adding interest to it every single day. Nearly $100.00 every month. I was not informed of this when getting the loan. So at my 18th month payment I will have paid a total of $2718.00 (not including the interest added per day). That's $1700.00 profit on a $1000.00 loan. Is this not predatory?
It sounds like you got this loan in Virginia or South Carolina, where these types of predatory loans are allowed. They still have truth in lending requirements, however, and the paperwork you signed probably had something on it which disclosed this. I recommend you take a copy of everything you signed to an attorney licensed in the state where you got your loan. Loans like this are not allowed in North Carolina.
This message is intended for informational purposes only. It is impossible to consider all relevant facts from a message board question. No attorney-client relationship has been created. Readers should seek a personal legal consultation with an attorney of their choice for the most accurate advice.
As Attorney Coleman stated, that is precisely why these types of loans are illegal in NC. But they are perfectly legal in other jurisdictions. Title loans are emergency loans and the quicker you get out from under them, the better. The problem is that people get caught in the spiral and never get out, or at least end up losing your collateral. There are laws relating to truth in lending, and you should review your case with an attorney. However, if the lender was up front with you on the total amount you would owe at the end of the loan, even if that amount is outrageous, you might not have much of a case.
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