Perhaps the state with the most significant payday loan laws is that of Georgia. In its general form, payday lending is illegal in Georgia.
That means that individuals should not attempt to accept any type of loan like this.
This law focuses on protecting consumers from the too-high prices associated with these loans.
For many people in the state, this is good news because it keeps you from overpaying for the small loan you needed.
What Is the History of Payday Loans in Georgia?
In Georgia, the state began putting new laws in place to restrict the use of payday loans in 2004. Prior to this, these loans were allowed and were commonly available to consumers.
However, the Georgia Industrial Loan Act put regulations in place to protect all borrowers. The law passed by the Georgia General Assembly increased the fines and penalties for those lenders making small loans at an illegal interest rate.
The law, which went into effect in May of 2004 charged fines of as much as $25,000 per violation with the possibility of up to 25 years in jail for those making these loans within the state.
What Are the Laws on Georgia Payday Loans?
Rather than allowing individuals to take on small loans for repayment in just a short period, Georgia has significant laws that prevent the onset of such loans. Here are some of the restrictions you will find.
- The minimum amount of any loan must be at least $3000. Loans lower than this violates the Georgia usury law.
- Loans under $3000 with an APR of above 16 percent are not allowed.
Keep in mind that there are no payday lenders operating in the state due to the law. That doesn’t mean that individuals can avoid all Internet-based lenders.
This may be an option, though it is not something that’s considered a good idea. No more than three percent of the state’s population is using these loans.
Why did it do this? Is it a good idea? There are many reasons that the use of payday loans is restricted.
The Department of Banking and Finance states that such loans are abusive in their nature.
They state that it is very common for individuals to get caught in a trap of being unable to repay the debt and then have to cycle through the loans over and over, racking up more fees each time. The Georgia payday loans are in place to prevent this.
If you are caught in the payday loan trap we can help.
Please give us a call toll free at 1-877-280-5100 or fill out our free online quote forum. Once we receive your request one of our experienced negotiators will contact you.
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Cheers,
The End Payday Loan Team