103% Interest, Is It Legal?
I have a personal loan against one of my vehicles through a pawn shop type of place. They are charging me 103% interest. Is that legal?? Of course my intent is to pay it off after I flip something, but in the meantime I am paying all this money and nothing goes to the principal. Oh ya, and if anyh of you can offer me a loan against my vehicle at a reasonable rate, that would be WONDERFUL!
That is a very interesting rate. I would call a lawyer just to be on the safe side. It doesn't sound legal, but I'm not a lawyer. I would seek legal advice.
Check this:
http://caag.state.ca.us/consumers/general/usury.htm
Your creditor may be operating under some kind of exemption ... if so, your contract (you do have one don't you?) should make that kind of information clear ... there should be lots of large, bold print explaining why they can charge you what they're charging you.
If they are not operating under a safe harbor provision in the law, they are loansharks, plain and simple and you should get in touch with the CA attorney general (assuming Ahnold hasn't downsized them out of existence yet).
Hmmm, well, it does say 8.75% interest monthly on the principal, but 103% interest yearly. I don't understand that?
Sorry, Pinky, but it just may be legal, thepawn shop type place operating under local business code loopholes. Here in South Carolina, in this particular county i reside in , places similar to what you describe abound in number,advertising as" Title Car Loans- No Credit Check; You Keep Your Car!" yeah right- most everyone who applies loses their cars because as you mentioned, almost none of the payment goes towards principal paydown and the burden becomes unbearable for the person who in financial trouble, borowed against their car in the first place. By the way, on the 9x6 placard on their countertop, in small 10 point print, they do advise that their interest rate is--- 300% APR.....do check with an attorney and your local business operating laws or get ready togive up that car- and: Run like dickens in the opposite direction from these juke joints- best of luck...