Designation loans are alter financing methods for individuals with hard up or minimal credit version. For these humans, Engine vehicle ownership may be used as collateral to substitute for distress of or evil credit. While the native land of Georgia recognizes honour loans, it administers them in a course that is consubstantial to pawn exchanges.
How It Works
Georgia is one of two states to bail reputation loans according to pawn exchanges. Similar to a pawn, the broker accepts the vehicle as collateral and lends a fraction of the item's worth. The vehicle is subsequently given to the broker for collateral until the loan is paid in full. If the borrower successfully pays the loan off with interest, he receives possession of the vehicle. Failing to pay the loan and interest may result in the owner losing the automobile to the pawn broker.
Interest Rates
Borrowers do not have to agree to a contract that charges excessive interest for extended title loans.
Default: Written Notification
Brokers may not charge any late fees or take possession of a borrower's automobile without written notification of such action.Title pawn loans are given for Thirty days. Individuals and brokers agreeing to extend the time period may do so for additional 30-day periods. Pawn brokers may not charge consumers more than Twenty five percent interest during the first Ninety days, and may not charge more than Thirteen percent interest per month after the 90-day period.Although consumers must pay interest on title loans, they have the right to be notified of interest rates prior to agreement. In addition, interest rates may not exceed five percent per month in Georgia. Brokers charging more than the allotted percentage are guilty of a misdemeanor and could face criminal charges if reported by the consumer.
Time Period
Prior to taking ownership of the vehicle, the broker must inform the borrower that the company plans to take possession of pawned merchandise because of title loan default. Such notice must be given at least Ten days before repossession and should include an alternative to automobile possession. A consumer has the right to resolve title loan defaults in a peaceable manner even after receiving written notification of repossession.
