To put a long story short, I was looking into a payoff on my car loan today and I noticed something was way off. I knew I was getting myself into a bad loan when I got it, but due to financial reasons and other external reasons I was very limited.
Anyways to get to the point, on a $6000 3 year loan with a 24.99 interest rate(I know), my total payoff is $11,577.60 (not to mention $180 on fees to be allowed to pay my loan). Obviously these numbers don't make sense. Even if they weren't amortizing the interest over the 3 years the payoff would still
Be $10500. Now, my loaner did charge me a fee to take out the loan, which I recall to be in the $1800 or so range. The only thing that makes any sense to me is that they are charging interest on the fee they added on to take out a loan. For those that know more than I, are these legal business practices? I understand the fee and have no issue paying that, and I understand my interest is garbage and I have no qualm with paying that. However, I feel this is excessive and I was not made aware of paying interest on the fee I was charged.
On another note, I have paid 21 payments on this loan totalling $6700, and were I to pay it off today ($4800 or so) they are telling me I will owe them an additional $81 in interest. Something seems very, very off here and I'm wondering if all of this is even legal. Or do they think they can get away with it because only people in strong need will take out a loan with them?
Anyways to get to the point, on a $6000 3 year loan with a 24.99 interest rate(I know), my total payoff is $11,577.60 (not to mention $180 on fees to be allowed to pay my loan). Obviously these numbers don't make sense. Even if they weren't amortizing the interest over the 3 years the payoff would still
Be $10500. Now, my loaner did charge me a fee to take out the loan, which I recall to be in the $1800 or so range. The only thing that makes any sense to me is that they are charging interest on the fee they added on to take out a loan. For those that know more than I, are these legal business practices? I understand the fee and have no issue paying that, and I understand my interest is garbage and I have no qualm with paying that. However, I feel this is excessive and I was not made aware of paying interest on the fee I was charged.
On another note, I have paid 21 payments on this loan totalling $6700, and were I to pay it off today ($4800 or so) they are telling me I will owe them an additional $81 in interest. Something seems very, very off here and I'm wondering if all of this is even legal. Or do they think they can get away with it because only people in strong need will take out a loan with them?