Delaware judge says $1,820 repayment on $200 loan ‘unconscionable’
A Wilmington branch of the Loan Till Payday company. (image via Google Maps)
A Delaware judge has ruled in favor of a former hotel housekeeper who sued a consumer loan company that demanded repayment of $1,820 for a $200 loan, a loan agreement the judge declared “unconscionable.”
Monday’s ruling by Vice Chancellor J. Travis Laster involved a loan that Gloria James of Wilmington took out in 2013 to pay for food and rent. James went to a storefront business in Wilmington called Loan Till Payday, run by Utah-based National Financial LLC.
She obtained what was described as a Flex Pay Loan, requiring her to make 26 bi-weekly, interest-only payments of $60, followed by a 27th payment comprising both interest of $60 and the $200 principal.
The total repayments added up to $1,820, equating to an annual percentage rate of more than 838 percent.
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