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Where can I find title loan laws - or can you help?

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I know this is probably the wrong forum, but I'm not sure where else to post, I have a title loan - stupid desperate move - but here I am.

I live in IL & borrowed $3,000. Monthly interest = $657.00. I always pay more, so principle is now $1,200.

Question 1: Are they obligated by law to send a monthly statement even if you overpay? Each time I overpaid they sent no statement the following month. When I call to ask they said I overpaid so much that I'm not due for a payment & can skip a month. Each time I asked them to mail a statement anyway - they said they would but never did. (just want to add I know the reason they did this is because me skipping a payment mean more interest payments for them. I kept paying each month so I can get out of this loan)

Question 2: Shouldn't my monthly payment be reduced because the daily interest rate should now be based on $1,200 vs. $3,000? They still request a minimum $657.00 per month. Now I'm worried I don't understand how title loans work. Can they charge the original monthly interest until the loan is paid in full regardless if you have bought the principle down? I hope I'm wrong, but can they do that? I had a car title loan years ago with another place - the more I paid towards the principle the lower my interest payment became. Has something changed over the years?




$657.00 a month interest??? OUCH!!!

Sub: #1 posted on Mon, 07/14/2008 - 03:02

Unregistered


OMG that is outrageous...how long is this loan for?

Sub: #2 posted on Mon, 07/14/2008 - 08:59

ladybug ladybug

(Posts: 2757 | Credits: 282.45)

Title loans are specifically exempt from IL payday loan laws (the legislators were working on changing that this year, but it died in the committee). So basically, if you signed the contract, then you are screwed. (Sorry to put it like that).

What I wonder is if you have a true title loan, or a quasi-installment loan secured by the car title? (This makes a difference as to your question #2). In other words, did they give you a set number of monthly payments, or do you just keep rolling it over every month?

Now to answer your questions:
Quote:
Question 1: Are they obligated by law to send a monthly statement even if you overpay?

No. In IL, only credit cards are required to send monthly statements. However, you are entitled to a Verification of Amount Owing. They must provide it to you within 3 days - but your request must be in writing - and you are only entitled to this once every 6 months.

You should also be able to request a copy of your account record, which will show all your payments and how much was applied to interest vs principal.

Quote:
Question 2: Shouldn't my monthly payment be reduced because the daily interest rate should now be based on $1,200 vs. $3,000?


Yes and no. This depends whether it is a true title loan, or if it is an secured installment loan. You are correct that the daily interest is based on the principal -- this is the law and they do have to follow it. To get $657 off of $3000, the rate has to be about 266.45%. Therefore on $1200, the per diem interest is about $8.76 (or 262.80 per month).

If it is really an installment loan, however, your payments won't ever go down -- it just means that every payment you make is applied more to the principal and less to interest.

Sub: #3 posted on Mon, 07/14/2008 - 09:17

DebtCruncher DebtCruncher
Moderators
(Posts: 2296 | Credits: 269.79)

Thanks for the input guys.

And yes, I know this was stupid on my part....but money is just so damn tight these days! My credit is shot due to a divorce that included a bankruptcy, job loss, pay cuts & child support payments that were often suspended due to my ex's inability to work due to health issues. I'm trying to re-establish it, but it's tough. I took the loan because my son was graduting boot camp & it was so important to him that we all come see him graduate. I had to travel from IL to GA with my other kids - we would not have been able to make the trip if I didn't do this. I also needed extra money for some much needed house repairs.

The fact that I'm paying $657 a month to borrow $3,000 is crazy in iteself - what's even crazier is the amount of people who resort to this form of financial****
because they have nowhere else to go for fair loan - it's as lucrative predatory lending racket!

[color=Red]****Adult term removed - Jason[/color]

Sub: #4 posted on Tue, 07/15/2008 - 05:00

Unregistered


Small world ....

My family and I have lived in IL my whole life. My brother joined the army in 2006 and after boot camp he was stationed in Fort Stewart, GA. Two months after he moved there, the whole 3ID company was shipped to Iraq. He just got back from being in Iraq for 18 months.

Sub: #5 posted on Tue, 07/15/2008 - 06:09

DebtCruncher DebtCruncher
Moderators
(Posts: 2296 | Credits: 269.79)

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