Well I had to take a personal loan with a financial institution. They obliged me to take a loan insurance also that I had no choice to take otherwise they won't give me the loan. The big problem now is that I did not see in the contract that since 5 month they made me pay interest on the insurance premium. the insurance cost me 2800 and everymonth I had to pay 28% interest on the insurance plus 28% on my original loan amount. Is it normal or legal to do that? Even if it is legal why consumers have to go through all these cheating and dishonest policies? it that normal??? Please help
2007-03-01 15:06:35 · 5 answers · asked by Anonymous in Business & Finance ➔ Insurance
If they loaned you the money to pay for the insurance, yes, it's legal. Actually, premium financing for insurance may well have charged you more interest than that.
If they loaned you the money to pay for the premium, they aren't charging you interest on the premium, they're charging you interest on an additional amount that they loaned you to cover your "closing costs." It's not unusual for the price of insurance premiums or other things required for closing a loan (home inspections, etc.) to be added on to the loan amount so that they can be paid up front.
Although I do think 28% interest indicates that you're taking it on the chin for some other interesting financial choices, hmm?
2007-03-01 16:54:12 · answer #1 · answered by ISOintelligentlife 4 · 0⤊ 0⤋
This depends on the laws in your state. In mine, it's not legal to require credit insurance AND it's illegal to require the premium be financed with the loan (but if the premium IS financed by the borrower's clear choice, interest can be charged).
For a definitive answer, call your state's insurance commissioner's office and inquire about the insurance laws in your state.
2007-03-02 01:40:52 · answer #2 · answered by Suzanne: YPA 7 · 1⤊ 0⤋
In many state is not legal to required loan insurance as condition for loan. If is not legal your state you can win big suit. Attorney General will make them.
If your state is legal then they can charge inteerest because they loan money for the insure.
But I think is not legal most state.
2007-03-02 04:00:30 · answer #3 · answered by tewodros2 2 · 0⤊ 0⤋
Wow, that's really high! You didn't read teh whole contract . . . zug! That's as bad as the credit card companies! I suspect, however, that it's an UNSECURED loan.
Best thing to do is pay the loan off ASAP, or refinance with collateral, to get out from under the interest.
2007-03-01 21:42:23 · answer #4 · answered by Anonymous 7 · 0⤊ 1⤋
the government unearths the variety to get in to each thing. Even issues you component it has no company being in. the government needs administration over the freedoms we the folk think of we've.
2016-10-17 01:52:08 · answer #5 · answered by Anonymous · 0⤊ 0⤋