Judge Calls $1,820 Repayment on $200 Loan ‘Unconscionable'

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.

Copyright AP - Associated Press
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