Q: The terms of a payday loan I took out are illegal in my state. What can I do?
I just learned that in Illinois a payday loan can be for only 25% of your AGI-or $466 in my case. This loan was for $520 + $190 in interest. The max allowable amount of interest is also supposed to be only $15.50/$100-which this definitely exceeds.
Also, I was unable to pay the full amount in 30 days as agreed, so I have extended the loan 3 times, which also apparently is illegal in Illinois. According to state law I should have been offered an installment loan with no additional interest or fees. I have already paid these people $200 in principal and $702 in interest and STILL owe $468 which is due to be taken out of my checking account next week. Must I pay this? If not, how can I stop them from taking it? I am on Social Security disability and my check is direct deposited into my checking account every month-this is the account to which they have access.
Their office is, by the way, in south America.
A: Since yourfunds are limited, I suggest that you contact the illinois Attonrey general's Office. Their legal assistance is free. You also could hire an attorney to send the company a letter offering to repay the loan purusant to the terms of Illinois law.
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