Georgia amends its Installment Loan Laws | Limits & Restriction for 2022

A typical loan type used to finance a car, house, or other major purchase is an installment loan. You might even have a mortgage, which is an installment loan with a different name. Before you get loan online near me in Georgia, learn what an installment loan is and what you should know about them before applying for one.

Installment Loan Definition

Installment loanis your choice if you need to borrow money. Similar to a personal loan, installment credit requires that you make set monthly payments over a predefined period. This regular monthly payment will be simple for you to account for in your spending plan.

Monthly payments for installment loans are frequently the same amount. The loan is paid off and the lender shuts the account once you’ve made all of your required payments.

How Do Installment Loans Work?

With an installment loan, you take out a predetermined loan amount and pay it back over a predetermined timeframe. This type of loan is known as a “installment loan” because each payment is referred to as a “installment.” A high-interest personal loan is an illustration of an installment loan. 

A lump sum of money borrowed through an installment loan is paid back over a number of months or years in instalments, or installments. Installment loans can be unsecured or secured with property, such as a car.

Because you apply for installment loan online and borrow the money all at once, they operate differently than revolving credit, such as the kind you get through a credit card or home equity line of credit. Without requesting a new loan, you are not eligible for extra funding. Additionally, unlike payday loans, which demand full payback from your following paycheck, installment loans give you time to repay the amount.To stop predatory lending, certain states, including Georgia, have unique laws for installment loans.

Limits & Restriction on Installment Loans in Georgia for 2022

In the past, the Act, regulating installment loan lending, often only applied to anyone making loans of $3,000 or less with interest rates higher than 8%. Additionally, organizations incorporated or functioning in accordance with any Georgian or federal legislation governing mortgage companies were exempt from the Act’s application.

Additionally,Georgia Governor Brian Kemp signed HB 891and changed the GILA to require licenses for those who service installment loans. Prior to the revisions, only those that advertise or issue installment loans to individuals in sums of $3,000 or less were subject to the GILA’s licensing requirements. As amended, a license is also necessary for anybody who serves installment loans provided by others, with the exception of loans made by linked organizations.

The amendments to HB 891 also added a number of new exemptions from licensing. These amendments specify retail installment transactions carried out by retail installment sellers and retail sellers and transactions where a lender offers a consumer a line of credit of more than $3,000 but the consumer only uses $3,000 or less of the line, provided there are no restrictions that would prevent the consumer from using more than $3,000 of the line.

As a result of the repeal and reenactment of the GILA’s tax on interest provisions, installment lenders must now pay the Department a fee equal to 0.125 percent of each loan’s gross amount starting on or after July 1, 2022. This charge is required when a loan that is subject to the GILA is made. This new cost will take the place of the previous one, which was 3% of the total interest on any loan that was collected. The statute makes it clear that the licensee must pay the per-loan fee and that it cannot be passed on to the borrower as a separate, itemized fee or charge. The Department may provide additional clarification regarding the manner in which a licensee pays the fee.

Georgia’s Installment Loan Act Provides Consumer Protections

Once more, the Georgia Installment Loan Act applies to finance and loan organizations that issue consumer loans of $3,000 or less and satisfy specified requirements. The Georgia Department of Banking and Finance requires licenses for organizations that issue these loans. 

Visit the NMLS Consumer Access website, a free tool for consumers to ensure that the financial services company or professional with whom they seek to do business is authorized in their state, to ascertain whether an installment lender is permitted to operate in Georgia. If you believe you’re dealing with a company providing installment loans in Georgia but it’s not registered as a licensed company on NMLS Consumer Access.

How Should High-interest Installment Loans Be Repaid?

It could seem challenging to get out of an installment loan with a high interest rate. Many borrowers get caught in a debt cycle as a result of these loans, which is difficult to break.

If you have several debts, think about enrolling in a debt consolidation program that will combine them all into a single, lower-interest payment schedule. Prioritizing your higher interest loans and paying off the ones with the highest interest rates first is an additional choice.Ask your lender for an extended payment plan if these are not good choices for you. Though your monthly payments can be lower, you might end up paying more overall. Extensions are almost always available if your lender is a participant in the Community Financial Services Association of America (CFSAA).

The Bottom Line

With an installment loan, you can pay back your debt over the course of a predetermined term by making a set monthly payment. The money will be given to you in one lump sum, and you’ll have to pay the loan back according to a set repayment schedule. If you are a potential borrower in Georgia, consider the abovementioned regulations on installment loans in Georgia before applying for one. It is important to work only with the licensed lenders in order to avoid any predatory activity. 

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