Was it one that you wrote a post dated check for or a straight out high interest loan? I have had both types and if you don't make good a payday loan where you wrote a post dated check for the money, they will call the police on you and turn you in for writing a bad check. (at least they called the cops on me when I was two weeks behind). In the second type of loan. It was a $400.00 loan, and I made the first payment of $80.00 Then I lost my job. Now it is collections for well over $1600.00. Their ridiculous interest is 543% yes that is (five hundred and forty three percent annual interest). However, they can't get blood from a rock.
The borrower/debtor can be sued if the lender chooses. Generally such loans are small and states do not allow this type of lender to file a small claims case. However, some lenders will wait until the debt reaches a level that is deemed worth filing a creditor suit in the circuit court of the debtor's state.
Unfortunately, for some people this type of borrowing is often a must, but it really should be avoided even if the person has to sell property rather than enter into such an agreement. The interest rates and penalties attached to such loans are so exorbitant that the borrower can end up in a veritable money pit with no way to climb out. In addition, title loans in which the consumer uses their vehicle for collateral should be avoided at all cost.
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