Legal Question in Civil Litigation in California

I will try to keep this short. I needed a loan but unfortunately could not get a loan from a traditional lender. My wife has a friend who has a friend the had extra cash she was trying to hide from her soon to be ex-husband. Through my wife's friend, this individual loaned me the money I needed. I had a plan to pay her back, but that did not go as planned. Now the bad part: The loan terms. First, the lady that financed the loan has not and according to my wife's friend, will not speak to me. Second, on the $7000 I borrowed, I pay $700 per month and not one cent of that goes toward principal. Because of this, I have been paying her $700 per month for the past two years and I still owe the full $7000. The only way to pay the balance down would be to make extra payments of say $500 here or $1000 there. I am having trouble keeping up with the $700 let alone save up to make extra payments. On a loan with a normal lender, after the couple of years I have been making one time payments, I might be able to re-negotiate terms. In this situation, because this individual will not speak with me, it seems my hands are tied. Lastly I should mention that with the exception of the physical money that has changed hands, (only between my wife's friend and me), everything has been verbal, meaning there is no physical contract and (stupid me) no receipts. She has not proof she gave me the loan but I have no proof I have been paying it. I just want to talk to the lady that gave me the loan, but if she is so unwilling to talk to me, is there any legal action I can take to help get me out of this situation.


Asked on 5/22/15, 5:03 pm

1 Answer from Attorneys
Lyle Johnson Bedi and Johnson Attorneys at Law

This answer is based on a loan of $7,000 and you have made 24 payments of $7000. The lender is charging you $700 per month interest. The maximum amount that she can legally charge is 10% per year and the loan is in writing stating that the interest is 10%. If the loan is verbal then the maximum interest rate would 8% per year. On a $7,000 loan the yearly interest would be $700 per year. The amount of interest would no more than $1,400. Payments of $700 per month is $16,800 to repay the loan. She would owe you money.for the overpayment.

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Answered on 5/22/15, 5:21 pm


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