Borrowing in Georgia: What State Law Allows

Why there are no payday stores in Georgia

Code section 16-17-2 makes it unlawful to run a business that makes, offers or arranges loans of $3,000 or less unless the lender fits an exemption, such as a bank, credit union or licensed installment lender. The ban reaches disguised versions too: check-cashing deals, loans bundled with goods or services, and storefronts that claim to be agents for an out-of-state lender.

• Each illegal loan is a misdemeanor of a high and aggravated nature, punishable by up to a year in jail and a $5,000 fine.
• After three prior convictions, further violations are felonies, punishable by up to five years and a $10,000 fine.
• A payday loan contract can't make another state's law apply to you or force you to go to a distant court.

If an online lender offers you a payday loan in Georgia, treat it as a warning sign. Our guide to loan scams explains what to look for, and payday loan alternatives covers the legal options.

Title pawns: legal, local and expensive

Georgia treats a car title loan as a pawn. You hand over the title, and sometimes the car, for cash. The pawnbroker law, sections 44-12-130 through 44-12-138, sets the price ceiling.

The state's consumer protection office puts the combined maximum over a year at 187.5%. At the top rate, a $1,000 title pawn costs $250 a month just to keep it going.

Installment loans of $3,000 or less

Small installment loans are the legal small-dollar option. Since July 1, 2020, lenders making loans of $3,000 or less under the Georgia Installment Loan Act are licensed by the Department of Banking and Finance, whatever rate they charge. The Act limits loans to 36 months and 15 days and caps what the lender may add:

• Interest of up to 10% a year of the face amount, calculated on the original amount rather than the declining balance.
• A loan fee of up to 8% of the first $600 and 4% of the rest.
• A maintenance charge of $3 for each month of the loan.
• A late charge of $10 or 5 cents per dollar of the missed installment, whichever is greater, once a payment is more than five days late.

Because interest is figured on the full amount and the fees come on top, the APR on a small, short loan ends up well above 10%. Read the disclosure, and use the loan payment calculator to see what you'd pay each month.

Time limits and garnishment

Georgia's consumer protection office says the statute of limitations on credit card debt is generally six years, the same period that applies to written contracts. A payment can restart the clock, so read how old-debt time limits work before you send money on an old account.

After a judgment, a creditor can garnish the lesser of 25% of your weekly disposable earnings or the amount above $217.50 a week, which is 30 times the federal minimum wage. If the judgment comes from a private student loan, the cap drops to 15%. These limits apply even if several creditors garnish at once.

Getting help in Georgia

1. 1 Check an installment lender's license with the Department of Banking and Finance or on NMLS Consumer Access.
2. 2 Report an illegal payday lender or a deceptive title pawn to the Georgia Attorney General's Consumer Protection Division.
3. 3 Know your collection rights. See debt collectors and your rights and file with the CFPB if a collector crosses the line.

Common questions