Citi Financial
Rule of 78s Payoff Exceeded $10,000 Loan After 5 Payments

I requested a short term loan (gap loan) to cover my wife's medical expenses until my insurance check arrived. I borrowed $10,000.00 at 23% interest. Citi Financial broke the payments out for 60 months, equaling $281.85 per month. I made 5 payments of $281.85 over five months, sometimes $295 when I was late. I made a payment each month per the agreement.

When my insurance check arrived, I learned the payoff balance was MORE than what I borrowed ($10,035.00). A 5 month loan cost me over $1485.00 (36% interest per year). I'm no lawyer, but I believe that violates state usury laws. When I asked how it is possible to make 5 payments and owe more than I borrowed, they said my payments were late and they calculated interest using the rule of 78's.

It was the worst possible loan for short term financing, considering it is not what I asked for. I asked for a simple short term line of credit. The contract does say payments are calculated using the rule of 78's and even gives a detailed and very confusing equation for how it is calculated. It is my contention that Citi Financial misled me, and no one in their right mind would willingly agree to a loan of this type.

I could have crossed the parking lot and picked up a 28% line of credit at Fifth-Third Bank, but I chose Citi Financial at 23%. I expressed my anger at the situation, and the Citiservant said, "maybe you should have read the contract." They are crooks and made an already difficult situation even worse. I will never use a Citigroup service or product as long as I live.

Company: Citi Financial
Country: USA
State: Illinois
City: Carpentersville
Address: 142 S. Western Ave
Phone: 8478360338

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