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  1. #1
    Join Date
    Sep 2010
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    1

    Default Title Pawn in Alabama

    My question involves an auto loan or repossession in the State of: Alabama.

    My girlfriend was stupid and got a title loan on her car for $2000. She lives in Alabama. The annual interest rate is 133%. I've read where a judge ordered a cap of 24% per year interest. Is this true and is there any remedy here for her? She has been paying $214 + other fees monthly for a year now and the principal payoff is $2300. Absurd to me but is it legal?

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
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    73,006

    Default Re: Title Pawn in Alabama

    Only eighteen states permit high-interest "title loans" and, from what I can see, Alabama and Georgia are the only two states that treat "title loans" as pawns. The Alabama Pawn Shop Act provides,
    Quote Quoting Alabama Code, Section 5-19A-7. Pawnshop charge; amounts in excess of pawnshop charge.
    (a) A pawnbroker may contract for and receive a pawnshop charge in lieu of interest or other charges for all services, expenses, costs, and losses of every nature but not to exceed 25 percent of the principal amount, per month, advanced in the pawn transaction.

    (b) Any interest, charge, or fees contracted for or received, directly or indirectly, in excess of the amount permitted under subsection (a) shall be uncollectible and the pawn transaction shall be void. The pawnshop charge allowed under subsection (a) shall be deemed earned, due, and owing as of the date of the pawn transaction and a like sum shall be deemed earned, due, and owing on the same day of the succeeding month.

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