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my question to you is regarding a auto title loan that I acquired in the state of neveda on 5/30/06 in the amount of 5,500. I understood the loan to be towards principal and interest. I still have this loan and have recently found out that over ten thousand dollars later only 43.00 dollars has gone towards principal. They are asking me to resign another lease for 12 months which will raise my payment 300.00 more a month and will make it so the loan is paid off in a years time. Is this legal and is there anyway to get back some of the money that I paid towards the interest over these past two years as I have paid way more then what my loan was originally for.
Optional Information: Phoenix, ArizonaAlready Tried: Talking to the title company directly and looking about info. on the internet and contacting you
- What information was disclosed to you at the time you initially signed the Loan documents? Did you sign anything which clearly set forth the terms of the loan? If so, were the terms accurately set forth?
- Why are they asking you to sign another loan? Have they told you that you are required to do so, or are they merely asking?
- Just to make sure I understand, is this a title loan, where you took out a personal loan secured by your auto title? Or is this a loan for the purchase of a vehicle?
The answers to these questions will help me to answer your question.
Thanks,
Leslie
Reply to Leslie D.'s Post: They gave me the loan and told me that I had to pay it back within 30 or make monthly payments. I understood the loan to be just as I described in the last sentences above. That I would make monthly payments if I couldn't pay it off. In terms of them following the terms of the loan that is what I'm confused about as they say recently that the state of Neveda changed a bill stateting that all loans given out now have to be paid in a year and that is where my concern comes in to play....can they actually change this on me? That is why they are asking me to sign a new contract. This is a loan that is secured by my auto title. Thank-you, look forward to hearing from you.
- Did they offer to change the interest rate from the original loan term? The law they are referring to is AB478, which was put into effect in October, and limits the length of "high-interest" loans, including title loans, under Nevada law. However, the law also limits things including interest rates.
The law is meant to close a loophole which allowed these lenders to charge very high interest rates (probably the reason only 43.00 of your principal has been paid). So, although it looks like they can ask you to sign a new agreement because they are required by law to do so, their interest rates will be regulated so that you will be paying much more towards your principal.
If you feel that this lender has engaged in inappropriate disclosures or conduct regarding the loan, you can call your state's Attorney General's office. The AG's office will have a consumer protection division that will be able to answer questions about any inappropriate conduct here. For example, if you did not receive disclosures regarding the interest rate, etc. when you initially took out the loan, this violates federal law and you should report it to the AG's office as they can help you with any possible recourse against the lender.
Please let me know if you have any additional questions.
Experience: Five years of experience in private practice. Experience in family law and civil litigation.