This applicant needs a $5000 dollar loan to pay off some court fines in Fremont, California. He is trying his hardest to clean up his record (avoid a criminal record). He was caught driving without a valid drivers license on his way back from a friend’s house in San Bernardino, and to change his status of having criminal charges against him, and reducing his status to a simple traffic violation, he must pay five thousand dollars in the next couple of weeks.

At CLF we see similar loans being applied for on our sister web-sites all the time (almost daily), and it’s a sorry state of affairs when a stupid mistake on the road can cost you thousands of dollars and a pulled drivers license. It never pays to take that chance of being pulled over my the police and having your life so badly interrupeted – let alone the price of having criminal charges placed against you by the State authorities.

In this piece we suggested our ”borrower to be” (loan applicant) first try getting approved for a short-term loan by the local bank he handles his personal financing with. We were told that he had already applied for a loan with his local lending institutions, and failed to get approved. This is why he went online to find a quick emergency loan to pay off the courthouse in the Fremont area. 

We’re going to do two things here today in this posting. One, we’re going to review the loan application form that was filled out and submitted, and two, we’re going to look at the applicant’s options for getting approved. We will also figure out what a short-term loan will cost over a couple of different calculations.

First let’s see the filled out application form for more details.

Type of Loan : Personal Loan to Pay Off Court Fines

Why do you need a loan? : I have unpaid court fines in the amount of around $5,000 that are keeping me from getting my drivers license.  I was pulled over with no license and now I have to go to court.  If I have a license and insurance by my court date in two weeks, the criminal charges will be dropped to a traffic infraction.  Otherwise an additional $1,000 or more will become due.  I have a part time job and am a full time student in college with about $1,200 in tuition to pay and the same amount of money in my bank.  I have no other way to pay for my lump sum than to get a loan.  I’m desperate!

Normally $5000 dollars is not allot of money in the long run, but this is an emergency situation. I want to abide the courts in Fremont, but I really need a cash infusion fast. You will notice that the request for the loan includes a down payment of $1000 dollars, which will help the borrower considering the loan requested is between $4000 and $5000 dollars total.

The problem this applicant has, on top of this, is that his credit rating (FICO score) is poor. His FICO score is below 600 which means his interest (APR) on his loan is going to rather high.

How Much Do You Want To Borrow? : Between $4K – $5K

Length of Employment : Over 1 Year

Time at Address : Between 12 – 18 Months.

Age : Over 21

Anything else that would help us get your loan approved : I recently started paying off debts that affected my credit score and have been working very hard to streamline my day to day costs in order to pay off debt.  I have the next 5 weeks off from school and I plan to work 7 days a week just to make some extra money to pay off debt with.

Sex : Male

Marital Status : Single

Ever Claimed Bankruptcy? : No – never

 What State and City is your primary home address in? : Fremont, California

Have you checked out your credit report in the last year? : Yes

Would you consider your credit rating to be? : Poor

Collateral? : No

Down Payment? : Yes

If down payment, how much? Explain please : about $1,000 available.

Do you a have co-signer or co-borrower? : No

Employment Industry, Title, Experience, Background – All info is secure! : College Student, Student, Sophomore, Chemical Engineering, Restaurant Industry, Private Dining Server, 3+ years in the food industry.

Now that we have seen the details of our applicant’s predicament we can better understand how much his loan is going to cost him over the full term of the loan agreement with the lender, and we can further discuss the actual numbers for repayment. It’s important that this personal loan is approved quickly because it is an emergency situation. Then we will make a quick not on how to avoid this from every happening to you!

$5000 Dollar Personal Loan for Court Fines at 14% Over 2 Years

A typical personal loan with a bad credit rating can cost as much as fourteen percent over the term of the loan. Most lending institutions will only allow a loan as low as 5000 dollars be paid over a maximum term of 2 years – they want small micro-loans paid off, and off their books ASAP. So we are looking at the loan like this;

Principal loan = $5000
Interest (APR) = 14%
Length of Term = 2 years (24 months)
Repayment Schedule = Biweekly (paid off faster if you go this route)

Court Fine Loan for $5000 – The Payment Schedule and Total Interest

Total Amount to be paid back = $5,713.46
Total amount of interest = $713.46
Payments = $109.57 every 14 days

So his court fines will be fully paid off and stop him from having any kind of criminal record at all. Just a simple traffic violation on his record, which will be lifted within the next couple of years automatically. His interest cost on this small personal loan is just over $700 dollars, and his monthly payment in total is close to $210 dollars. This is a manageable payment and his interest cost is not that bad considering his bad credit rating and what the outcome would have been without the loan (criminal record). It’s worth applying for this kind of loan!

So for our second option we will look at loan shark rates, and although we at CLF NEVER recommend using a loan shark and their ridiculous APR – in this case it may be worth it. So for a loan shark you would be paying between 25% to 35% APR and that is if the loan shark is not TOTALLY predatory. Watch out and read the fine print on these short-term high interest financial instruments.

$5000 Dollar Personal Loan for Court Fines at 35% Over 1 Year

The usual loan shark will charge astronomical interest on any of their so-called legitimate loans and in this case we are considering a loan for our applicant at a rate of 35% APR. These kinds of unconventional lenders want their money paid back quickly, and for this loan we will conclude that all monies must be paid back in full within a one year term.

Principal loan = $5000
Interest (APR) = 35%
Length of Term = 1 year
Repayment Schedule = Monthly (high interest loan sharks do monthly payments only)

Court Fine Loan for $5000 – High Interest Bearing Loan Shark

Total Amount to be paid back = $5,947.74
Total amount of interest = $947.74
Payments = $488.86

As you can see, these two different lending options for a small loan of $5000 dollars are similar. What’s NOT similar is the amount you would be paying in interest if you ever neglected to make a payment during the term of the loan. The loan shark could jump the interest on the loan to 300% in a heartbeat and you will see that in the long and drawn out loan agreement (see the very bottom of the document in the fine print – tiny print)

In this last example the total interest on the $5000 dollar principal is just under $1000 dollars. The payments are monthly of course and come in just under $500 a month. It’s a viable payment plan, but the borrower will have to be working extra hours to ensure his payments are never late or defaulted on. NEVER miss a payment on this kind of high-interest yield.

Conclusion

Never drive without a valid driver’s license – NEVER. Use public transit, or get a friend to drive you from point A to B. We are happy to report that our borrower (and almost criminal) was able to borrow the money from a private lender. It turned out to be an informal loan from a family member, and this is often what happens in these kinds of criminal case loans.