It's Section 45-15-111(a) of the Tennessee Title Pledge Act which sets forth the interest and fees that may be charged. It specifies that the title pledge lender may contract for and receive an effective rate of interest not to exceed 2% per month; additionally, the lender may charge a fee equal to no more than 1/5 of the original principal amount.
OK. So, the contract called for 42 total payments, which, according to the above, would allow for a maximum of 21% if I am interpreting that correctly. Is that right?
Also, the sales price was just over $10K. IF I pay the full contract amount for the full term, I would be paying just over $16K for the car. Which, is more than 1/5 of the principal.
So, it seems to me that I may have legal grounds to get out of this contract. Is that correct?
Thank you.