Legal Question..

[TOR_LordRaven]

Anyone with working knowledge of the legal system?

Here is the skinny - I got a small, unsecured Loan a little over a year ago.
The Loan itself was for $4,100, and payments are $215/month.

The loan was for 2 years I think, but when I called to check on my payoff amount, they told me it was $4,300

I found this to be Odd because I have been making regular, ontime payments. Not late once.
I understand that the older the loan gets, more money goes to principal, and at the beginning, the majority goes to Interest.

But in this case, 0% has gone to Principle, and 100% gone to interest. In fact, the amount Due has increased by $200.

This seems illegal. To make matters worse, my payment schedule, as signed by them and myself, shows that i should be at or around $2,500 by now.

I have reached out to them several times (Unfortunately they have no store front, but i hear their ads on ESPNRadio all the time).
Each time the Rep I speak with (Someone state side thankfully) is as perplexed as I am, and says they will forward my information on to a special department.
And of course, that department never contacts me.

Do I have any legal recourse here?

[callmeslick]

did you read the contract you signed to get that loan? Under current law, lenders of small, unsecured loans can approach usury, with 27% interest and all sorts of fine print that has you in hock to them forever. Buyer beware and good luck!

[Tunnelcat]

This is actually pretty common for all loans, but especially for smaller loans. What they're doing is taking ALL your early payments and applying those to pay just the interest, which for small, unsecured loans can approach usury rates, as slick mentioned. Plus, if the rates keep climbing, and I don't know if that's legal, your payment towards that interest will also climb if you didn't get a fixed rate. Usually, as you get farther into the loan payments, you'll start seeing more and more of your payments going towards paying down the principle. By the end of the loan, almost all of your payments will go towards the principle. They do this to make sure they make a hefty profit, just in case your decide to pay off the loan early or default. Even if you pay off the loan early, they still might stick you with an early termination fee, so they can get you coming and going. But be sure to read your contract if you think they're doing something crooked, or if you got taken for a ride with adjustable rates. They may have taken the recent Fed rate increase to stick you with higher rates.

http://www.expertlaw.com/forums/showthread.php?t=167261

[Ferno]

Check your state laws -- especially those that surround consumer protection and see if there is a stipulation regarding interest rates.

[TOR_LordRaven]

Yes - I checked the fine print. I am actually on what they consider a "Long Term" Payment plan, except its only 19 months.
Per the verbiage, i should be getting a 0% interest rate.

The loan amount was $4100. "If paid in full for the duration of the contract, amount you pay is: $4100".
That $4100 divided by my $214 a month equals 19 (give or take), which is the same payment schedule that is spelled out in the contract that both parties signed.

[Ferno]

How many months have you paid now?

[Tunnelcat]

Yes - I checked the fine print. I am actually on what they consider a "Long Term" Payment plan, except its only 19 months.
Per the verbiage, i should be getting a 0% interest rate.

The loan amount was $4100. "If paid in full for the duration of the contract, amount you pay is: $4100".
That $4100 divided by my $214 a month equals 19 (give or take), which is the same payment schedule that is spelled out in the contract that both parties signed.

You're still going to get docked mostly for the interest early on before you start paying down the principle. By the end of the loan, you'll see most of your payments going towards the principle. That's how these sharks make their money, they pretty much get most of it from you at the beginning of the loan term. Our first home mortgage worked that way as well. It was irritating to see all those monthly payments go towards just the interest, but that's the way things worked. If you're really worried, talk to a lawyer, but that will cost you too.

[TOR_LordRaven]

an update if anyone was wondering.
I am paying 0% interest, but the web-site does not reflect it.

The department that never contacts me finally did, and gave me that via e-mail.

so, alls well that ends well

[callmeslick]

good to hear, thanks for the update.