Legal Question in Civil Litigation in Alabama

Pay day loans in Alabama

I asked a friend to take out a pay day advance loan for 150.00 loan + 26.00 interest =176.00 in his name because I didn't have the means to get one. We had verbal agreement saying that WHENEVER I got the money I would pay him. Months down the line I tried to pay him the 176.00. He stated that he went every two weeks and paid the interest so the loan could roll over until I paid him. In the end he claimed he paid about 700.00 in interest on a 176.00 loan when he could have paid the 176.00 and I pay him back. Am I entitled to pay him 700.00 or the original 176.00 loan?


Asked on 3/30/09, 2:42 pm

1 Answer from Attorneys
Mari Morrison Mari Morrison

Re: Pay day loans in Alabama

Depends on how much he actually paid. If you offered the full amount the first time it came due and he rejected the money, then it is possible that was a new agreement. But if the payment came due the following week and you did not pay him, nor weeks following thereafter, you would owe the money that he had to pay for the interest. Assuming that is $26 per week, you can see how in 4 weeks it would acrue to $104. And if you waited more than 5 months, the interest would be over $500. So it depends on when you offered to pay and if he rejected it, what was the agreement then?

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Answered on 3/30/09, 6:32 pm


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