Legal Question in Banking Law in California
loan add-on
I have an auto loan and a visa card at a credit union. I am current on the car but was late on my Visa, I went in to pay off the car ($2,400.00) and they informed me that they added on the balance of the VISA to my auto loan. I need to get the pink slip to the car, do they have the right to add this on without my permission? I have the money to pay off the car loan but not the VISA portion, how can I negotiate this or can they even do this?
1 Answer from Attorneys
Re: loan add-on
This is called "cross-collateralization" and is a very common clause in credit union loan agreements. Can they do it? It is really impossible to say without reading the actually loan agreement. I suggest you get a copy of the car loan agreement and any other loan agreement with the credit union and go see a local attorney about this.
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