What to do about excessive interest being charged on payday loans?
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What to do about excessive interest being charged on payday loans?
I have 3 payday loans. Details are as follows: Loan #1 – $600 loan; $127.50 fee; Loan #2 – $500 loan; $175 fee; and Loan #3 – $400 loan; $125 fee. LA law says the maximum a company can lend is $350 and fees cannot exceed 16.75%. I’m having trouble paying these back due to the high fees. How should I proceed? Do I call the lenders, tell them I know they are acting illegally and negotiate lower fees? Since LA does not allow loans to renew, can I get the companies to work out a payment plan that stops me from incurring these renewal fees?
Asked on May 13, 2011 under Bankruptcy Law, Louisiana
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If your state department of financial institutions licensing this type of lender, and these particular ones do not have a license in your state to loan money to Louisiana state residents, then those loans are illegal and your state may have repercussions like not having to pay the loans back. You need to file a complaint with your state's department of financial institutions and with your attorney general and see if that could help you stem the collection tide. Further, report or dispute these matters with your credit reporting companies that have these on their reports and include any information you obtain from your state's banking department.
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