By David Pilley on July 6, 2011
/typing-(1).jpg.aspx?width=75&height=75) If the title of this article ended with a question mark, I might be tempted to simply type the word “no” and have it published. No spell check would be necessary, it would be so easy! While payday loans are banned in the state of Georgia, that doesn’t mean someone living in Georgia can’t get one. For any state that does not allow payday loans, including my home state of North Carolina, the Internet is the way payday lenders get around the ban.
Georgia has done a lot to crack down on excessive interest rates. Not only has it banned payday loans since 2004, but any type of loan whose interest rate surpasses the state usury law is illegal. Any loan of $3,000 or less cannot have an APR greater than 16%. Although the term “payday loan” is not specifically stated here, these characteristics basically describe all payday loans, since they rarely exceed $1,000 and their APRs can end up being over 600%. Therefore, it is illegal to sell payday loans in the state of Georgia. The breaking of this law is indeed a felony, which could lead to a fine of up to $25,000 and a jail sentence of up to 25 years.
However, this does not mean that citizens of the Peach State cannot get a payday loan. It is perfectly legal for you to go on a website and purchase a payday loan from a company based in states like California and Massachusetts, where these loans are legal. In fact, websites like samedaypayday.com and mypaydaycashadvanceloans.com encourage you to purchase payday loans.
Because of this situation, Georgia has extra laws regarding the payday loans that are purchased online. There is no specified maximum amount a consumer can borrow, although payday lenders will generally limit the amount to $1,000, the average amount of one paycheck. Under the legislation HB 515, the maximum fee that can be charged is 15% of the loan’s amount, and total fees for the loan cannot exceed $45. There are no restrictions on loan terms, and if a default occurs, the lender can take any legal action to get the money back. The state limits each borrower to four loans at a time.
Though payday loans are currently illegal in Georgia, they might not always be. HB 163, which would have legalized the loans, was narrowly shot down in 2007, and there is sure to be some new bill in the near future addressing this issue. The real answer to the question about payday loans in Georgia is not a simple yes or no, but a combination of the two. Though nobody can sell them in the state, people can still purchase payday loans from a company in a state where they are legal. Not only that, Georgians can purchase up to four at a time. Defaulting on a payday loan is not a good way to learn about the 50 states, trust me.
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