QUESTION
When repaying a loan is it within legal bounds for a creditor to take monthly payments over amount and apply them as minimum payments?
Asked on Aug 14th, 2012 on Business Law - North Dakota
More details to this question:
I was paying 500 to 1000 a month to Sallie Mae, but it appears they only applied minimum payment to collect more interest. I borrowed 12,000 now they want me to pay them 37,000 back after interest.
1 ANSWER
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Your question is unclear. As a general matter, whether or not a loan is in default, interest continues to accrue. If you make payments on a loan, your payments are applied first to payment of interest and late fees before application to principal.
Answered on Aug 14th, 2012 at 1:12 PM