California State Usury LawI took out a payday loan on 11/21/06 in the amont of $300.00. As of 03/30/07 this company has taken $734.00 ffrom...

Question

California State Usury Law

I took out a payday loan on 11/21/06 in the amont of $300.00. As of 03/30/07 this company has taken $734.00 ffrom my checking account for that loan and tried to deduct another $224.00 on 03/30/07. Is it legal in California for them to take this much money away from me on a $300.00 loan?

Answer

Re: California State Usury Law

There are usury laws in place to protect consumers from such lenders. You should retain legal counsel immediately to remedy the situation, upon review of your contract with the payday lender at issue.

Answer

Re: California State Usury Law

Payday loan companies can charge almost 300% interest over a year. However, your situation sounds a little different in that it has only been 4 months and they have already collected over 200% of what is owed.

I would definitely collect all paperwork you have regarding this debt and take it to an attorney who specializes in either debt defense or Consumer Law.

-- Amy E. Clark Kleinpeter