Cana bankuse any amount of a payment for late fees instead of interest and principal on an auto loan?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Cana bankuse any amount of a payment for late fees instead of interest and principal on an auto loan?
My auto lender keeps using part of my payment on a auto loan on late fees instead of the principal and interest. Is this legal? It seems like they are double dipping.
Asked on September 1, 2011 under Bankruptcy Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
You need to check the terms of the loan agreement or contract; if the agreement allows them to apply part of a payment to any late fees, then they can do this. Note that it is very common for various loan or credit agreements to provide that when there is a late fee, either any payments are automatically applied to it first, or the lender has the option to apply the fees however it chooses.
Therefore, this may very well be legal, but as stated, the loan contact or agreement will govern--whatever it says, goes. You should review the agreement in detal, including the "fine print." You can also contact the lender and ask them to point out the term or provision allowing them to do this. Good luck.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.