Pay day advance loans.

[sunshine86]

What is the name of your state (only U.S. law)? AL

I asked a friend to take out a pay day advance loan for 150.00 loan + 26.00 interest =176.00 in his name because I didn't have the means to get one. We had verbal agreement saying that WHENEVER I got the money I would pay him the 176.00 back. Two weeks later I asked him to go and pay the loan completely out and I give him the money. I lost my job and months down the line when I got a job I tried to pay him the 176.00. He stated that instead of paying the loan he went every two weeks and paid the interest so the loan could roll over until I paid him. In the end he claimed he paid about 700.00 in interest on a 176.00 loan when he could have paid the 176.00 and I pay him back. Am I entitled to pay him 700.00 or the original 176.00 loan?

 

[Zigner]

What is the name of your state (only U.S. law)? AL

I asked a friend to take out a pay day advance loan for 150.00 loan + 26.00 interest =176.00 in his name because I didn't have the means to get one. We had verbal agreement saying that WHENEVER I got the money I would pay him the 176.00 back. Two weeks later I asked him to go and pay the loan completely out and I give him the money. I lost my job and months down the line when I got a job I tried to pay him the 176.00. He stated that instead of paying the loan he went every two weeks and paid the interest so the loan could roll over until I paid him. In the end he claimed he paid about 700.00 in interest on a 176.00 loan when he could have paid the 176.00 and I pay him back. Am I entitled to pay him 700.00 or the original 176.00 loan?

Pay your friend in full - that's what you agreed to do.

 

[Antigone*]

Pay your friend in full - that's what you agreed to do.

I totally agree with this poster. You owe him the FULL amount of the pay-day loan.

 

[Zigner]

I totally agree with this poster. You owe him the FULL amount of the pay-day loan.

+ the interest

 

[Antigone*]

+ the interest

abso-dang-lutely

 

[sandyclaus]

I don't get how a $176 loan comes up with $700 in interest over just a few months...?

Ordinarily, I'd say yes, pay the loan plus the interest because you haven't paid it back yet, but that amount of interest seems quite excessive. Even with pay day loans and their high rates. For instance, here in CA, for a $255 loan, I'd be paying $45 in interest/fees. But over $700 for an even lesser loan amount??

I'd be interested in knowing how much that interest was supposed to be. Plus, there is such thing as mitigating your damages. Who would pay $700 in interest to keep rolling over and not just pay off the $176 loan instead?

I say there is something really fishy going on here, and definitely good reason to question that high interest figure.

 

[Antigone*]

I don't get how a $176 loan comes up with $700 in interest over just a few months...?

Ordinarily, I'd say yes, pay the loan plus the interest because you haven't paid it back yet, but that amount of interest seems quite excessive. Even with pay day loans and their high rates. For instance, here in CA, for a $255 loan, I'd be paying $45 in interest/fees. But over $700 for an even lesser loan amount??

I'd be interested in knowing how much that interest was supposed to be. Plus, there is such thing as mitigating your damages. Who would pay $700 in interest to keep rolling over and not just pay off the $176 loan instead?

I say there is something really fishy going on here, and definitely good reason to question that high interest figure.

Nothing fishy....it is the nature of the beast when it comes to pay-day loans.

 

[TheGeekess]

I don't get how a $176 loan comes up with $700 in interest over just a few months...?

Ordinarily, I'd say yes, pay the loan plus the interest because you haven't paid it back yet, but that amount of interest seems quite excessive. Even with pay day loans and their high rates. For instance, here in CA, for a $255 loan, I'd be paying $45 in interest/fees. But over $700 for an even lesser loan amount??

I'd be interested in knowing how much that interest was supposed to be. Plus, there is such thing as mitigating your damages. Who would pay $700 in interest to keep rolling over and not just pay off the $176 loan instead?

I say there is something really fishy going on here, and definitely good reason to question that high interest figure.

You're in California. OP is in ALABAMA. Different ways of handling pay-day loan companies in different states. In fact, in some states, they are ILLEGAL.