Is a payday loan a predatory loan?

Is a payday loan a predatory loan?

Interest on lion’s interest case law

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The cost of many payday and car title loans is expressed in terms of fees based on the amount borrowed. For example, in the case of a payday loan, the lender may charge you a $15 fee for every $100 you borrow. These fees can equate to APR rates ranging from 300% to 400%.

I am being charged too much interest

It is very common for adhesion loan contracts, that is to say, those contracts that are not negotiated but imposed by the creditor, to include a clause with a late payment interest rate of 24%, 27% or even 29%. They are contained in contracts of large banks. The drama of this clause is usually revealed in cases of foreclosure and when interest is paid once the principal has been satisfied.

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The Courts have too often blessed these clauses because of a misunderstood principle of freedom of agreement, because it is less problematic to give reason to the powerful or because the humane and equitable application of legal rules requires an extra effort. Fortunately, the panorama has changed a lot for consumers and users thanks to the thrust of the European Directives and the Court of Justice of the European Union.

Thus, the recent judgment of the Supreme Court of 22 April 2015 leaves no room for doubt about the power and obligation of the courts and tribunals to control the possible unfairness of non-individually negotiated clauses that establish interest for late payment in loan contracts with consumers. And what is more relevant, it includes and creates criteria to determine when the clause is abusive and what consequences derive from its declaration of nullity. This is undoubtedly important because it will facilitate the work of judges and magistrates when it comes to dispensing justice.

Abusive interest rates

In the November election, more than 4 out of 5 Nebraska voters approved a ballot initiative that would cap interest on ultra-high interest short-term payday loans at 36%. The previous law allowed annual rates to rise as high as 459%.

However, a week before the election, an obscure branch of the U.S. Treasury Department, called the Office of the Comptroller of the Currency (OCC), issued a ruling that many consumer advocates say could undermine the intent of Nebraska voters, as well as laws and regulations against payday lending in other states across the country.

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The initiative in Nebraska made it the 19th state, besides Washington, D.C., to either ban these ultra-high-interest short-term loans or cap interest rates at a level that effectively prohibits them because lenders no longer consider the business profitable enough.

What happens if I do not pay a santander personal loan?

2. The experts study each case in order to file a legal claim against usurious interest: we will advise you on the claim option with the best chances of success (claim for usury, for lack of transparency, for abusive clauses, or for all of them).  You will be able to go to court with a law firm of recognized prestige, specialized in the matter.

Household consumer credit is growing at over 15%, with a serious risk for families, who fall into a dangerous situation of over-indebtedness, but also for the entities.

Added to this are deferred payment cards with usurious interest rates and, more dangerously, “revolving” cards where the user pays less than the amount due, so that the debt continues to increase.

Often, it is users with fewer resources who are trapped in a spiral of infinite debt, caused by usurious interest rates. However, the Supreme Court has ruled that any “loan contract with an interest rate significantly higher than the normal interest rate for money and manifestly disproportionate to the circumstances of the case or in such conditions as to be unfair” is considered null and void. So if your interest is usurious, we help you to claim.

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