Late fees on auto loan

**myangelvac** · 11-04-2005, 10:14 PM

Hi...I'm new here and would like some help. I have a loan though a friend of my fiance's for a car he sold me. In the note he did not give me a grace period of any kind but since he was a friend I didn't think he would play games, legal or otherwise. Well here's the situation. I agreed to pay him $300 a month but my payment this month is going to be about 4 days late and he wants me to give him an additional $50. Is that amount legal for 4 days late? Is it legal period for him to want me to pay that much or am I out of luck because I was stupid enough to trust him and not have an attorney look over the note on my behalf? His attorney is the one that put the contract together. Thank you so much in advance for helping me out. I am meeting him on Wed. to make the payment.

Lisa

**Mr. Knowitall** · 11-05-2005, 07:03 AM

Late fees are a form of liquidated damages, and are provided for by contract. You can't simply impose a late fee on somebody without any contractual basis. Depending upon how much money is at stake, demanding such a late fee without any basis in contract could also run afoul of state usury (unlawful interest rate) laws.

**myangelvac** · 11-05-2005, 07:39 AM

If there is no late fee what happens if the payment is going to be late? There were no provisions for a late fee or grace period. Per the note, it just says that the payment is due on the 5th of the month and that's it...nothing is said about how late the payment can be before he can pursue legal actions. Thanks again.

**Mr. Knowitall** · 11-05-2005, 07:58 AM

I haven't read the contract, so I am not going to guess as to what happens in specific instances under the contract.

Sometimes a late payment will permit the lender to accelerate the debt, and demand payoff. But if you want to know what remedies are available under your contract and in your state, you should have the contract reviewed by a lawyer.

**nikkiweb** · 11-08-2005, 04:09 AM

I too had a similar situation and I did have a lawyer look over the contract, since they was nothing at all stated in the contract about late fees or grace period, amounts of late fees, then they were not inforceable, now being that it was a contract between my cousin and I we could usually work out payments even if one would be late, but my lawyer cautioned me about ever paying a late fee or even interest since it was not written in, that is just my experience I would check with someone with contract experience if the lienholder is going to be nasty about fees and such just to protect yourself,
Nikki