Georgia Laws on Payday Loans

Payday loans can have interest rates in excess of 400%.

A payday loan is a short-term high interest extension of funds by a lending agency, against a consumer's ability to repay the loan quickly. Many states have enacted payday loan laws to assist consumers in avoiding the pitfalls and high fees that come with a high-interest loan, like a payday loan. The state of Georgia has laws that regulate which businesses may conduct payday lending to ensure that all financial transactions are done responsibly and with clear language.

License Requirements

In order to conduct payday lending in Georgia, businesses must obtain a license through the Georgia Department of Banking & Finance. Applicants must state the name of the company, physical address, records showing the business' net worth (must be at least $25,000), and include any criminal offenses. In order to have the application approved the person or persons applying for the license must be able to establish a "surety bond" with the state of Georgia for $100,000. Additionally, the commissioner of approval must find the applicant's character, financial standing, and experience in business to be in good order.

Restrictions on Fees

Payday loan companies in Georgia may not charge more than 15% of the face amount of the check being loaned to the consumer. According to paydayloanlaws.com, total fees for an individual payday loan cannot exceed $45. The state of Georgia does not regulate loan terms for payday lending, which means the loan company can assess any interest rate against the amount loaned to the consumer.

Loan Agreements

Loan language must be written in a clear and easy-to-understand manner with all financial amounts communicated in U.S. dollars. The loan must plainly state the annual interest rate for the loan and the date the loan will be funded. Payday lenders must acquire proof, in writing, that the person being extended a payday loan has no current outstanding payday loan balances.

Default

In the state of Georgia payday loan companies may pursue all available civil avenues in reclamation of funds extended to a consumer. Additionally, the borrower may not have more than four outstanding payday loan checks at any one time, and may not have a revolving balance of more than $500.

References

• Payday Loan Laws: Georgia