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  1. #1

    Default Per Day Late Charge 15% of Monthly Note - Is This Legal

    My question involves a consumer law issue in the State of: California


    Car cost $18000
    Downpayment $6000
    Original loan amount $12,000 (May 2007)
    Interest Rate 15%
    Monthly payment $283
    Payments made so far 21
    Remaining balance $8800
    Bank: Fireside
    Never over 30 days late.



    I have a monthly payment of 283 dollars (this includes 15% of the total loan and the principle). My payments are due on the 2nd of each month.

    The bank is charging a "per day" late fee of 15% interest of the monthly note and applying it to the remaining balance.
    That's $42.45 per day.

    Last month, due to job loss, i was almost 30 days late and $1100 in late charges was applied to the remaining balance. My balance went from $7800 to $8800.

    Being that the $283 monthly rate includes interest on the total loan. Then the late fee applies 15% of the $283 to the total remaining balance (which already included interest), it's like i'm being charged interest on top of interest. I don't think I'll ever pay my way out of this loan.

    I didn't see this per day charge in my contract (i need to review again).
    Is this legal?

  2. #2
    Join Date
    Sep 2005
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    Default Re: Per Day Late Charge 15% of Monthly Note - Is This Legal

    Yes, you do need to check your contract.

    A 15% Per day late fee sounds unconscionable; it doesn't appear that it could be in any way related to the actual damage suffered by the lender.

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