What You Need to Know
The state of Georgia requires title loan lenders to be licensed because they’re being regulated to protect you, the consumer. In Georgia, title loan lenders are regulated and licensed in the same way as pawnbrokers. This gives you the option for legal recourse in the event your lender acts contrary to state regulations.
If you own a vehicle outright, you may be able to use its title to get a loan. There are no minimum or maximum loan amount, which means this will be decided entirely by you and the lender. However, the lender is likely to take into account things like income and the value of the vehicle.
Contract Requirements
- Name and address of lender
- Notice that failure to make your payment as described in this document can result in the loss of your motor vehicle.
- Length of the loan
- Interest rate for the first 30 days
- Interest rate for each 30-day period of any extension
- Full dollar amount that must be paid in the first 30 days and after
- Repayment date
Interest Rates & Fees
During the first 90 days of your loan, or any extension, you may accumulate interest or charges for each 30-day period. The exact amount owed in addition to the loan amount, in total, must equal at least $10 per 30-day period and no more than 25% of the loan amount. For example, on a loan of $2,000 during the first 30 days you will be charged between $10 and $500 in interest and charges.
If your loan period is extended to last more than 90 days your lender may charge, for the period longer than 90 days and in addition to the loan amount, interest and charges equal to at least $5 per 30-day period but no more than 12.5% of the loan amount. For example, between the 90th and 120th day of your loan extension, you will be charged between $5 and $250 in interest and charges on a $2,000 loan.
Any fees or charges your lender imposes must be adequately disclosed to you. If such charges are not properly disclosed or are more than what is legally allowed then you are entitled to recover them, if you’ve already paid, or refuse to pay them if you haven’t. You can only recover these charges for two years after you noticed, or should have noticed, the error. In any event, before seeking legal action, you should inform your lender in writing and by certified mail or statutory overnight delivery, return receipt requested, of the charges you are disputing and that you are considering legal action. The lender has 30 days to remedy or make an offer to remedy this situation.
How You’re Protected from Repossession
Unless you and your lender have agreed otherwise, if you default on your loan your lender is entitled to repossess your vehicle, without further notice and without judicial intervention. You may also be charged additional fees related to the repossession and sale. If your vehicle is repossessed you may be charged:
- Up to $5 per day in storage fees
- A repossession fee of $50 if your vehicle is within 50 miles of the lender’s office, $100 if within 51-100 miles, $150 if within 101-300 miles, and $250 if beyond 300 miles of the lender’s office
While your lender is entitled to repossess your vehicle, and charge related fees as laid out above, he/she is not entitled to more than what they are owed. This means that if your car is repossessed and sold it is to cover your debt only, and any remaining money belongs to you.
For example: If you take out a loan for $2,000 and agree to pay the loan amount, interest, and charges of $350 (including the cost of placing a lien against your vehicle) within 60 days of the loan date. You are unable to pay and default on your loan. Your lender then repossesses your vehicle and places it up for sale after storing it for 7 days. At the sale, your lender receives $10,000 for your vehicle. You now owe your lender $2,435, $2350 + 50 (storage fee) + 35 ($5 storage for 7 days). Your lender received $10,000 for the vehicle, so the excess of $7,565 legally belongs to you.
References
“2016 Georgia Code.” Justia US Law, 2017,
https://law.justia.com/codes/georgia/2010/title-44/chapter-12/article-3/part-5/44-12-130
In his role as our dedicated “numbers guru,” Tracy takes charge of Titlelo’s financial planning, analysis, and forecasting. With an impressive 20-year accounting background working alongside CPA and high-tech firms, we rely on him to steer our fiscal ship towards continued success. Tracy’s invaluable contributions to our team are characterized by his hands-on approach and unwavering commitment to precision. With his expertise, we are empowered to implement inventive, pragmatic, and results-focused financial strategies, propelling Titlelo’s clients to new heights.