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I just received a pre approval for a $2500 loan in the mail. It's funny since I applied else where and I received this from American web loan . I'm trying to consolidate my debt so I go online to check out this offer . Congratulations your approved for $2500 ok, just what I need . I'm not one to just click accept without reading the fine print . The old me would have just accepted it , not anymore you get in a lot of trouble that way . So anyways I did not accept the loan . Here's why the finance charge is outrageous 10643.30 Apr 480.69 total payments 13143.30 I think that's crazy for a 2500 loan .Now they keep sending me emails to accept. It's nice to be approved but I think I'll wait for a better offer to come along .
@Anonymous wrote:I just received a pre approval for a $2500 loan in the mail. It's funny since I applied else where and I received this from American web loan . I'm trying to consolidate my debt so I go online to check out this offer . Congratulations your approved for $2500 ok, just what I need . I'm not one to just click accept without reading the fine print . The old me would have just accepted it , not anymore you get in a lot of trouble that way . So anyways I did not accept the loan . Here's why the finance charge is outrageous 10643.30 Apr 480.69 total payments 13143.30 I think that's crazy for a 2500 loan .Now they keep sending me emails to accept. It's nice to be approved but I think I'll wait for a better offer to come along .
Wow...smart move not accepting that predatory loan. That is one huge APR. I can't imagine anyone knowingly accepting that high rate. You did the right thing. Thanks for letting us know.
I've always wondered about the deluge of mailers sent for these types of loans. I've read that they are very dishonest, and rarely make any sense to borrow in this manner.
I've sought a personal loan to pay down high interest credit cards, but when I get more information, usually the interest rate is at, or even above, the original credita card APR! These companies will pester you as well.
1.) So when you reviewed the loan terms, was it all interest charged up front, so that even if you borrow $3,000 one month and then repay, say $3,200, the very next month, you will still be left with a huge bill, the $13,000 you speak of?
2.) Are there any companies one can recommend that DO actually make sense for someone trying to reduce interest rates and not just "save $15,000 over 10 years by paying us $10,000 in interest up front for a $5,000 loan"?
What's worse than just the APR is that it will likely report as a "consumer finance account" which WILL ding your FICO scores for 10 years after paying it off.
Many many years ago, a local loan shark outfit was offering a terrible loan at 40% APR or something (and had online payment fees and other bad news) but they offered a "10% bonus to your first payment" offer. One of my neighbors decided to get their $3000 loan and pay it off a few days later for $2727.28 so the bonus of 10% made it $3000. He got $272.72 in free money. He also discovered if paid in full quickly they wouldn't report to the CRAs at all. So I did the same loan at $3000 and got my free money. We both did it 3 or 4 times over a few months until they got rid of that 10% free first payment bonus, lol.
I know I made around $1000 free over that summer and it was glorious.
@Anonymous wrote:I've always wondered about the deluge of mailers sent for these types of loans. I've read that they are very dishonest, and rarely make any sense to borrow in this manner.
I've sought a personal loan to pay down high interest credit cards, but when I get more information, usually the interest rate is at, or even above, the original credita card APR! These companies will pester you as well.
1.) So when you reviewed the loan terms, was it all interest charged up front, so that even if you borrow $3,000 one month and then repay, say $3,200, the very next month, you will still be left with a huge bill, the $13,000 you speak of?
2.) Are there any companies one can recommend that DO actually make sense for someone trying to reduce interest rates and not just "save $15,000 over 10 years by paying us $10,000 in interest up front for a $5,000 loan"?
I wish I could upload a photo of the contract. This is what the truth in lending shows .
APR 480.69 FINANCE CHARGE $10,643.30 AMOUNT FINANCED $2,500.00 TOTAL PAYMENTS $13,143.30
24 payments of $547.69
According to a blog post from 2014 on a credit website, they found this in the terms:
"Loans obtained from American web Loan are governed by the law of the Otoe-Missouria Tribe, not the law of your resident state. The law of your resident state may have interest rate limits and other consumer protection provisions that are more favorable. If you wish to have your resident state law apply, you should consider taking a loan from a lender licensed within your state."
Basically, they're a tribal lender so they're not held to any state regulations on loan terms. I'm not sure if they are even covered under any federal laws since tribal law generally works around many federal laws.
Their loan is stipulated to being a very very short term loan for 2 weeks. But in order to fleece consumers, what they do is they set up your auto-pays to cover only interest and very little principal so the 2 week loan ends up taking years to pay off.
Since it's only a 2 week loan they can state they charge an interest FEE (not interest rate) that equals about 15-20% of the loan for 2 weeks, but since your auto-pay only covers mostly interest and rolls the loan over for 2 more weeks, your payment doesn't make a dent and they give you another 2 weeks to pay it off with a new interest FEE (not rate).
I made the mistake of taking one of these to pay for some home repairs- complained to the CFPB (they were unlicensed in my state) and they agreed to settle for the principal...never again.
THANKS FOR YOUR STORY. I DID ACCEPT A LOAN FROM THEM. BIGGEST RIP OFF IN THE WORLD. MY FAULT FOR READING THE FINE PRINT. NEVER AGAIN MY FRIEND , NEVER AGAIN. I WOULD WARN ANYONE THAT WANTS A LOAN FROM THESE PEOPLE PLEASE STAY AWAY. PLEASE//////////////////
@pizzaman1 wrote:
I fell into the same trap. Accepted an offer without reading anything and was charged an astronomical APR. never again