Legal Question in Banking Law in California

I obtained an auto loan from a Credit Union with a loan amount of $20,000 in June of 2012 with a max term of 60 months at 2.99% APR. I purchased a used car in June 2012 with a financed amount of $19,214.28. The monthly amount due is $291.85. I made my first payment in July 2012 and I have always paid $300 toward my loan (never missing a payment). I currently have 4 payments remaining on the 60 month term however my remaining loan balance seems too high at $3596.55. When I contacted my bank I was told that the balance is so high because I need to pay at least $305 per month in order to cover the interest. When I asked how that is possible when the minimum monthly amount due should be covering the principle and interest and I was still paying more than my minimum amount the customer service rep hung up on me. I would like to know what my legal rights are if my payments were calculated incorrectly by they bank. Am I still responsible for the outstanding balance? If more information is needed please contact me by email.

Thank you

Asked on 2/27/17, 1:10 pm

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

According to my calculations your monthly payment should have been $345.17 in order to pay it off in 60 months. Unfortunately that does not get you out of paying the balance due any more than you get to keep money mistakenly credited to your checking account. It may, however, entitle you to an extension and a credit for some of the interest paid. Since you relied on their payment calculation, you were paying down your principle more slowly than if you had made the full payment. As a result, you have paid more interest than you should have. Unfortunately again, however, as of a 2/1/17 payment, that would only amount to $181.36. Even if they let you keep paying until it was paid off, starting now at the correct $345.17 rate, you would only overpay by $243.91. So really the most you are entitled to is an extension of time to pay off the loan at $345.17 going forward, with a credit of either $181.36 now, or $243.91 against the final payment.

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Answered on 2/27/17, 7:19 pm

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