Is there a limit to what a loan company can charge you for interest on an unsecured loan?

Question

I recently got a loan from a company called "cash call". I had to go ahead & accept the loans terms at 59% interest as I had to have some surgery & now everyone is telling me that what they are charging me in interest has to be illegal? Does anyone who if ths is true or how to find this information out?

Answer 1

Yes...interest rates on non-secured loans are typically rate capped by the state....for example my state (NC) is capped at 15%.
It differs by state. I have linked to prosper.com info on state rate caps and policies.

Additional info: They can often charge fees that are not counted toward interest. I did some work for a mortgage broker and the stuff they tacked on could often exceed the state rate but was technically below it because it was considered fees and not part of the interest rate.

Answer 2

Unfortunately, from what I understand, as long as the interest rate is disclosed in writing prior to the agreement, a lender can charge whatever they like.

Many companies charge what I consider to be outrageous interest rates. It has been my experience with store credit cards (Sears, Home Depot, etc.) the interest rates are often around the 25% mark. Additionally, I have known individuals who purchased a computer from Gateway at 30% interest.

Fifty nine percent is definitely an exorbatant amount of money. My suggestion is this: Go to a bank or credit union and refinance as soon as possible! Or, not that this is something I would always reccommend...but put it on a credit card! Even at 10%, 15%, or 20% interest, you're still saving a lot of money.

Answer 3

I have a loan with them also and it is really bad. I pay about 300 a month and for about 1&1/2 years and the balance is still more than what I have borrow. Now I have to get another loan to pay them off. I have missed a payment by 10 days and they called me like 10 to 20 times a day.

Answer 4

Interest is usually regulated by states under a usury law. However, creative financial companies get around this by charging fees, penalties, future daing, and other techniques to charge customers for money, but not charging through a true interest rate.

Answer 5

they provide credit enjoying cards to every physique? Yeah top, i can't get one from Orchard economic corporation! in any case, I fell like the mastercard enables you to purchase something one month and in case you pay it the spectacular way you might have it paid off in like 6 months extremely of having quite some money abruptly.