Question from DOTTIE, What are the legal limits on APR, finance charges, and fees for installment loans in Missouri?
Answer from AI:
In Missouri, the laws governing installment loans are outlined in the Missouri Revised Statutes, specifically in Chapter 408, which covers loans and interest rates. However, the laws can be complex and may vary depending on the type of lender and the specifics of the loan agreement. Therefore, it’s always recommended to consult with a legal professional for personalized advice.
Annual Percentage Rate (APR)
Missouri law does not explicitly cap the APR for installment loans. However, it does regulate the amount of interest that can be charged. According to Section 408.100 of the Missouri Revised Statutes, the maximum interest rate is generally 10% per annum, unless the parties agree to a different rate. However, the agreed-upon rate must not be “unconscionable.”
Finance Charges
The law does not specifically limit the amount of finance charges that can be imposed on an installment loan. However, these charges are typically considered part of the cost of the loan and may be subject to the same regulations as interest rates.
Fees
Missouri law allows lenders to charge certain fees in addition to interest. These can include origination fees, late fees, and non-sufficient funds (NSF) fees. However, these fees must be agreed upon in the loan agreement.
Payday Loans vs. Installment Loans
It’s important to note that Missouri law treats payday loans differently from installment loans. Payday loans, which are short-term loans typically due on the borrower’s next payday, can have much higher interest rates. According to Section 408.500 of the Missouri Revised Statutes, the APR for a payday loan can be as high as 1,950%.
Given the complexity of these laws and the potential for high costs, it’s crucial to understand the terms of any loan agreement before signing. If you believe a lender is charging excessive interest or fees, you should consult with a legal professional.
The answer is written by AI.
The text above is written by AI, i.e., a computer.
Disclaimer: The information provided in this response is intended for general informational purposes only and should not be considered as legal advice. While we strive to provide accurate information, we make no guarantees regarding the accuracy or legal validity of the information presented. Laws and regulations vary by jurisdiction and can change over time, and the application of laws can vary widely based on the specific facts and circumstances involved. Therefore, you should consult with a qualified legal professional before making any decisions related to legal matters. Do not rely solely on the information provided in this response for any legal decisions. We disclaim any and all liability with respect to actions taken or not taken based on the contents of this response.
Related Posts
Please comment in the comment section below if something is incorrect.