Is a 56% Interest rate on a loan in California illegal?

Question

I have a loan with Cash Call that carries a 56% interest rate. Is this legal? I have been told by bank employees that they did not think this was legal. Please help - any information would be helpful!

Answer 1

From a Loan Shark maybe...



contact your state's department of consumer protection

Answer 2

According to NY law: These small-dollar ($100-500) loans, which the borrower promises to repay out of his or her next paycheck or income, generally carry an interest rate of 500 percent, on an annualized basis. New York State law prohibits charging over 16% for such loans. Yup, it's probably illegal!

Answer 3

Yup, illegal in California.



However, be careful. There is something called "importation of interest rate", which is a stupid supreme court decision that says that if the lender is based in another state, THAT state's laws apply to the interest rate. So 2 or 3 states have abolished caps on interest rates, and most banks are based in those states, enabling them to ignore all other states' interest rate laws and charge as much interest as they want.

Answer 4

I think this illegal. You should check with the consumer division of the state of California. I would be really hard pressed to believe that some company could get away charging interest rates that high.

Answer 5

Any loan with any interest rate is legal if you AGREED to its terms. Nobody put a gun to your head and said "TAKE OUT A 56% INTEREST LOAN OR I'LL KILL YOU" therefor its not illegal.

Answer 6

I think in California, those are not strictly loans. Read your paperwork carefully.



and I am sure a few minutes spent with google will get you a definitive answer.

Answer 7

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Answer 8

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