Title loan lenders provide consumers with short-term cash advances in exchange for the title to their vehicles. Notorious for imposing high interest rates on their short-term loans, title loan lenders are regulated by state laws. In Georgia, title loan lenders are subject to the Georgia Code Annotated rules regarding pawnbrokers and cash advance companies but can enter into loan agreements with consumers who use their motor homes as collateral to secure their title loans.
Redemption Rights And Interest Limits
Title loan lenders must provide consumers with a 30-day redemption or grace period after the due date to redeem their vehicles by paying the entire loan balance due, including interest penalties and late fees.
Georgia law limits the interest rate that title loan lenders and pawnshops can charge consumers. The state interest rate is capped at 300 percent annually or 25 percent per month for the first three months of a title loan. After the first three months, Georgia law caps the remaining interest rate at 150 percent annually or 12.5 percent per month.
Written Disclosures
Georgia law required title lenders and pawnbrokers to provide a written disclosure pursuant to Section 44-12-138(b) of the Official Code of Georgia Annotated. Title lenders and pawnbrokers must include a written warning or disclosure statement to consumers in their loan documents. The written disclosure statement must warn each consumer that failing to repay the title loan can lead to repossession of his vehicle and that the title loan lender has a legal right to charge him for incidental repossession fees. The Georgia Official Code Sections 44-12-131 and 44-12-138 cover the respective repossession rights between title loan lenders and consumers.
Enforcing Judgments
The Georgia Fair Lending Act, codified in Title 7 of the Official Code of Georgia Annotated, regulates the lending practices of home loan lenders. However, the Georgia Fair Lending Act does not cover vehicle loans, title loans or pawnshop loans. Georgia title loan lenders can lien personal or real property by obtaining a "writ of fi fa" or "write of fiera facias" through the Georgia Superior Court in which the debtor owns his motor home. After a title lender obtains the writ from court, the Sheriff's Office seizes the debtor's motor home. Under Georgia law, creditors are responsible for paying any necessary costs to storage facilities in which vehicles were stored, but they may impute those charges to consumers who default on their title loans.
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