Americash Loans

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Can this be legal?
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I am posting this in hopes that others who check this out will make a better decision than me. I took out an $1800 loan with Americash Loans about 6 months ago to fly to Colorado to spend time with my dying sister. (

I knew the interest was scandalous at 295%, but thought I would be able to pay it back within two months. As bad luck would have it, I got hit with several unexpected expenses with my car (which I need for work) and I ended up missing two bi-weekly payments for this loan.

After just 30 days, I received in the mail a copy of a wage garnishment letter that had been sent to my employer. Because the payments weren't made on time, the interest accumulated into more than a third more than what the original balance was.

I called the collections department and ended up speaking with one of the rudest human beings I have ever dealt with. I guess it must take a special type of person to work at a place like Americash Loans.

When I was a kid, these types of places didn't really exist - at least not legally. Back then, it was called racketeering. In fact, since Americash makes you sign a wage garnishment agreement as a condition of the loan, they are incurring very little risk in exchange for the interest rate of the loan.

Please do yourself a favor and avoid this company! You would be better off selling your personal possessions if you need quick cash than dealing with this horrible place.

Please do not respond to my post with 'you shouldn't have been so stupid to take out the loan', etc. I was at a very desperate time and I had every expectation that I would be able to pay the loan out early. I was very aware of the interest rate but this company has nearly forced me into bankruptcy. In the end I paid them to prevent them from garnishing my wages, but I had to skip my mortgage payment to do so.

I thankfully now have the loan paid off and will have nothing further to do with them except to encourage government officials to stop this place and others like it from squeezing unreasonable amounts of money from hard up people. It will be a day of great joy to see this place close shop in the state of Illinois.
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User Replies:
Anonymous on 01/06/2010:
First, the 294% is NOT the monthly rate, that is the yearly APR. Your monthly rate would be ballpark 25%, about the cost of a pawn shop interest. It is quick money when you need it. What was your collateral

Second, you signed the agreement and the loan garnishment agreement in order to get the loan. You can not come back later and blast the company for doing exactly what they said they would do when you defaulted.

It does not matter WHY you didn't pay. You can not call a company bad for executing a contract and enforcing it. YOU held them to their end by expecting them to give you the money they promised. When you failed to uphold your end, they took action.

"It will be a day of great joy to see this place close shop in the state of Illinois."

Ironic. That is not how you felt when your sister was dying and you needed money was it?
Anonymous on 01/06/2010:
That's how those places work. You need fast cash, they give it to you. That's how those places stay in business, and make money. They offer people who need fast cash the opportunity to get it. If they didn't have such strict policies on repay, then anyone can go in there and get money, and never pay them back. The place would never stay in business if they did. I'm sorry about your troubles, but companies are not going to make an exception of the rule, no matter what the need of the money is for. They are there to make money.
MaggieMcT on 01/06/2010:
Don't they have to have a court order to garnish wages? Or does that vary from state to state?
Anonymous on 01/06/2010:
IDK if they do or not, never had that situation arise.
Anonymous on 01/06/2010:
Maggie, NOT if the customer is told up front and signs an agreement to it as a condition of the loan.

Basically, it is like any loan contract you sign. They plainly say that if you default they will sue you to get the money. This company just bypasses all the hooplah and gets straight to it. It is in the contract the customer signed and agreed to.
DaveyC on 01/07/2010:
Lady Scot, with respect, I did not insinuate that the 295% rate was monthly as that is not how percentages are normally communicated. This is an annual percentage rate (APR). Collateral? Yes, I did - my paycheck. Do credit card companies demand collateral? No, they don't. Do they charge 295% APR. No. Would the public be up in arms if they did? You bet.

If you re-read my post, I would not call it a blast, and you'll also read that my advice was to avoid this type of company by selling household items, etc. because by taking this kind of loan out, it is a big risk.

I did state that The staff have been rude, and they have. If you had a car loan (with the car as collateral) and explained that there was a situation and you would be back on your feet in 30 days and would make payment then, they would work with you and wouldn't come to tow your car away. (even though the vehicle is collateral). This company does not care and will stop at nothing from what I can see.

I'm not angry about Americash pursuing their right to recoup their principle, but I do think it is unreasonable to do so after only 30 days of default and without even calling to say so.

I also think there should be a limitation on how much interest they can charge. By any standard, 295% is unconscionable. (or perhaps you think it is a reasonable percentage).

At a minimum, in my opinion, this type of company should be heavily regulated so they cannot charge such exhorbitant rates.

And, it would seem I am not alone in my thoughts:
Slimjim on 01/07/2010:
Whoa, I'm with Maggie. Wage garnishments need court orders. OK, they got you to sign an agreement to it if defaulted, but I honestly believe that would get thrown out of court if called out. Why wouldn't all lenders make a borrower sign such a document then? I think they may be the best bluffers on the face of the earth.
MaggieMcT on 01/07/2010:
That's why I asked. And even Lady Scot said " . . . if you default they will sue you . . ." So, they still have to sue and get the court order. I wonder if the OP has seen the garnishment papers? I'd want to check them out and see if they're legit.
PepperElf on 01/07/2010:
Yes maggie and slim are correct.

"Wage garnishment occurs when an employer is required to withhold the earnings of an individual for the payment of a debt in accordance with a court order or other legal or equitable procedure (e.g., Internal Revenue Service (IRS) or state tax collection)."

It doesn't vary from state to state - the link is from the United States Department of Labor

which means they had the legal right to send the letter to the OP's employer
Anonymous on 01/07/2010:
Slim, without knowing the state it's hard to say since wage garnishments are a state issue so long as they don't violate federal law. Assuming it wasn't court ordered then my first thought is that the employer was under no legal obligation to honor the garnishment request but also could legally honor it as well so long as the employee didn't object.

State laws are wacky and forever changing so it would be very interesting if the OP provided the state. I'd love to research this one.
Anonymous on 01/07/2010:
PepperElf, Some states like Tejas don't allow private creditors to garnish wages. So without knowing the state you don't know if the company had the legal right to send the letter or not.
PepperElf on 01/07/2010:
yeah cos the DOL site says this about states...

If a state wage garnishment law differs from Title III, the employer must observe the law resulting in the smaller garnishment, or prohibiting the discharge of an employee because his or her earnings have been subject to garnishment for more than one debt.

if anything I think the OP should go to the DOL site and read up, instead of just posting online complaints
PepperElf on 01/07/2010:
ahhh I see

I retract where I say it doesn't vary from state to state
Anonymous on 01/07/2010:
PepperElf, The OP states this issue is resolved so I don't think they're seeking advice so much as they are offering up a lesson learned for others.

I would like to know more details about the OP's claim they put their paycheck up for collateral. How did that work? Was the garnishment court ordered or simply a contract delivered to the OP's HR? What state?
PepperElf on 01/07/2010:
eh. too bad he didn't know about it earlier then

cos well... if he's getting the WG done to him, it most likely went through the courts
and if he was in a WG-free state, the employer would kind of know that, no?
Slimjim on 01/07/2010:
No way in 30 days that was court ordered. It would take at least twice that to get a court date just to lose the case, which is the first step. Then you have to violate a judgment order and not pay. Then the plaintiff goes back to the court to go get them to issue a garnishment order. 6 month plus undertaking.
"my first thought is that the employer was under no legal obligation to honor the garnishment request"
That's my reaction too. I wonder if the document is even legal and not considered deceptive business practices.
Anonymous on 01/07/2010:
PepperElf, I agree with you on that but what I took from this review was the OP somehow voluntarily pledged part of his paycheck as collateral for the loan and then the creditor was able to get an allotment from the OP's paycheck without going to court. Perhaps I'm misunderstanding the situation which is why I've ask for some more details from the OP. Interesting all the same.
DaveyC on 01/07/2010:
Just jumping in here... By saying that I put my paycheck up for collateral, I was referring to the fact that I signed an agreement of wage garnishment.

There is no 'suing' done as Lady S suggests, instead the signed agreement is sufficient in the state of Illinois - no lawyers needed.

As PepperElf indicated: "Wage garnishment occurs when an employer is required to withhold the earnings of an individual for the payment of a debt in accordance with a court order or other legal or equitable procedure (e.g., Internal Revenue Service (IRS) or state tax collection)."

Apparently, in the state of Illinois, a signed agreement of a wage garnishment in default of payment is consided LEGAL or EQUITABLE. Therefore, no court order is required. A letter was sent to my employer complete with a copy of my signed agreement. Following that, an "intent to garnish" letter was sent to me from the external company that handles our payroll.

At any rate, I didn't try to fight it, simply paid it and moved on. I posted this here, not as a rant or blast, but as information to others out there that need a quick buck... My advice is to look elsewhere. This company is ruthless.
PepperElf on 01/07/2010:
well I guess you found the answer you were looking for then in the "can this be legal" in your title...
Anonymous on 01/07/2010:
DaveyC, Thank you for the update.
Anonymous on 01/07/2010:
This is covered under the ILLINOIS WAGE ASSIGNMENT ACT.

"Wage Assignment
A wage assignment is a written document, signed by the employee, at the time the debt is incurred, giving the creditor authority to attach part of the employee's wages if the employee is not paying his or her debts. No court order is needed to enforce a wage assignment." -- from

What's next debtor prisons? You learn something new everyday I'll tell ya what.
PepperElf on 01/07/2010:
I take it that agreement is a typical document to sign when applying for a loan in Wisconsin?
DaveyC on 01/07/2010:
Ha PepperElf - the "Can this be legal?" was intended to be rhetorical. Obviously, these rackets are legal - there are dozens of them in Chicagoland. But, in my opinion, they shouldn't be.
PepperElf on 01/07/2010:
o. I thought you were really asking if it was legal
Anonymous on 01/07/2010:
"Lady Scot, with respect, I did not insinuate that the 295% rate was monthly as that is not how percentages are normally communicated. This is an annual percentage rate"

I know this. YOU misunderstood. You are mad about the APR you agreed to. Your monthly interest rate would have been around 25%. The 294% is your monthly rate TIMES 12, hence the words ANNUAL percentage rate. And yes, every creditor has one, even a credit card. Whatever your monthly rate is, multiply by 12, and you get your yearly rate.

Credit card rates are high too, honey. Some up to 30%, which would make their APR 372%. I don't hear anyone up in arms.

You also say your paycheck was collateral. So, if your tv or car was collateral and they could legally take it on a defaulted debt, WHY would you think using your paycheck as collateral means they shouldn't be able to take it?

WHY sign your name to things you do not agree to? YOU gave them permission to take your check.
PepperElf on 01/07/2010:
true, true.

kind of like my old saying about contracts.

if they fall short on their side of the contract it's really bad and illegal
but when the customer has to uphold his/her side of the contract suddenly the contract is unfair
DaveyC on 01/08/2010:
Dear all - as I've stated a couple of times here - this post was designed as warning to others out there. I actually selected "informative" not "complaint" for that very reason.

I think I have adequately expressed, for the majority of people who will read this post, that borrowing from this type of company comes with great risk. I think I have also adequately expressed (for those who take the time to read) that I'm not bitter at Americash for getting what rightfully belongs to them. I.e., the cash that I borrowed from them. I have paid them fair and square. But I still think that the rate is excessive. Thanks for the info LS, I wasn't aware that there were credit cards that approached 400% APR. I stand humbly corrected. Haven't heard about them, but I would classify that as a racket too.
jktshff1 on 01/08/2010:
Davey, that's the best comment here.
jojo2011 on 01/30/2011:
I am a former employee of americash Loans and the 294% apr was the yearly interest rate for a checkbook loan. The way the loans work is that you pay the interest off first and than the principal. In regards to the wage assignment there are steps that need to be taken before a wage assignment is sent to your employer, AmeriCash makes several attempts to call you and let you know that you are past due. AmeriCash does not want you to default especially now since the apr is no longer at 150%, 294%. And guaranteed they called you because they make calls everyday sometimes 2-4 times a day trying to collect, they want you to stay current because they want to switch into the new apr after a certain amount of payments, The new apr on a checkbook loan is 400% and on a signature 465% a installment 300%. once you have paid maybe ten payments Americash wants you to refinance the loan so that they can take you to the higher interest rate. And yes there are some employees that work in the collection department that are rude, but if you do not want to go into collections pay what you can call corporate and try and set up payment arrangements, if you cannot do that and you feel like they are collecting in an Erroneous way read your contract. To answer your question no it is not legal that is why Obama is working on changing the lending practices.
kitty76 on 02/01/2011:
Good stuff Jojo, at least you explained where everyone can understand. It's obvious that LadyScot is an employee of these contemporary loan sharks and has taken to the offense. The main thing is people need to be aware of the interest rates. The more you can pay to pay it off, the less you will have to pay later. It's a good alternative for thos who have credit woes, you just need to know how it all works to make it work to you ability. My advice would be to not borrow more than you can pay off in one paycheck.
jktshff1 on 02/01/2011:
Aside from this being a yr old, I can assure you that LS never worked for one of these companies.
Anonymous on 02/01/2011:
Some people can't see the forest on account of all the trees jkt.
PepperElf on 02/01/2011:
ript - indeed.

it's kind of sad how they see "disagreement" and automatically scream "employee", especially if the person disagrees actually has intelligence.

*shakes her head sadly*

lynn on 07/01/2013:
I am also a former employee. This company does have high interest rates, but everything is explained at the time of the loan. Also if you miss your payment, they call you every day and leave voicemails trying to work with you to keep you out of collections. They do help with payment arrangements, it just sounds like the person who posted this didn't want to answer her phone and was trying to see how much she could get away with. Also its interest per day which goes down with every payment, so if you don't pay, the interest doesn't go down and you end up paying more. All of this is explained at the time of the loan, but some people don't listen or read what they sign - they just want the money.
Anonymous on 08/20/2013:
If consumers would read what they are signing they would see that the wage assignment agreement is "VOLUNTARY" and can be revoked.....seriously, don't slam the company for choices YOU as a consumer made.
jdinlv on 12/06/2013:
I need a loan and am thinking of borrowimg from Americash. The terms of 12,18,24 months attracted me, most places give you 90 days to pay your loan back. The fact that I can afford the monthly payment, I'm considering it. But one thing, I'm only talking to one person., John Gage, is he real? Where are they based? Where is the corporate office?
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