What is considered to be a legal interest rate?
Question Details: My girlfriend "bought" some furniture from a rental center last year for $1400. After paying $169 a month for 16 months, she called and was shocked to find out she owes 16 more payments of $169. The pay off amount today is over a $1000. I calculated the interest rate to be almost 12% a month, almost 140% APR a year. How can this be legal?
The definition of usury, or unfair interest rates, is defined by state law. Some titke companies charge as much as 350% interest rates. The important thing to consider is whether the rate was fully disclosed at the time of the origination of the loan. If yes, no foul. If no, there may have been a violation of a federal fair debt and/or loan law. I would advise you to take the original documents to an experienced consumer credit attorney for evaluation.
Rate This Answer:
Not Yet Rated
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.