What do I do if my loan company is charging me $300 for a loan insurance deposit when I have already given them $300 for the first month? 3 Answers as of March 31, 2014

I was trying to receive a loan for a school. The loan company agreed to $5,000 based on my credit. They have asked for the first month’s payment which I gave. Now they are asking for $300 after I gave them the first deposit and says it's due to insurance. They are withholding my money from me and says I can't get it back unless I pay the $300 insurance deposit. I have no clue what to do seeing as this is my very first time taking out a loan.

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James T. Weiner & Associates, P.C.
James T. Weiner & Associates, P.C. | James T. Weiner
I cannot answer this without seeing the paperwork and knowing more.
Answer Applies to: Michigan
Replied: 3/31/2014
Edelman, Combs, Latturner & Goodwin, LLC | Daniel A. Edelman
Any company that asks you to pay out of pocket to get a loan is very suspicious. Do not pay.
Answer Applies to: Illinois
Replied: 3/31/2014
Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
I have never heard of an insurance requirement for a loan other than some commercial mortgages. You should have the loan documents reviewed by an attorney in fact, it would have been wise to have done that before you signed the paperwork.
Answer Applies to: Arkansas
Replied: 3/31/2014
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