Personal Loans in Georgia: Two Sets of Rules, Split at $3,000

Loans of $3,000 or less: the Installment Loan Act

The DBF describes the Georgia Installment Loan Act as the law that regulates loans of $3,000 or less and the lenders that make them. Besides interest, a licensed lender's agreement may list loan fees, a closing fee, a monthly maintenance charge and a late charge; the DBF's rule 80-14-5-.03 sets out how the closing fee and the late charge work.

The late charge is quoted in the DBF's installment loan rules: on an installment not paid within five days of its due date, the greater of $10 or 5 cents for each $1 of the installment. Because the loan fee and maintenance charge count as finance charges, the APR on your Truth in Lending disclosure will be well above the stated interest rate.

Loans over $3,000: the usury statute

For larger loans the general interest law, O.C.G.A. 7-4-2, applies. On a principal of more than $3,000 and less than $250,000, the lender and borrower may agree by written contract to any rate of interest, expressed as simple interest. The only ceiling is the criminal usury law, O.C.G.A. 7-4-18, which makes it a misdemeanor to charge more than 5% a month, directly or through fees or any other device.

That is why the National Consumer Law Center lists Georgia at about 60% APR on a $10,000 five-year loan (August 2023 figures), the highest $10,000 cap among the states it rates. A larger loan has fewer protections here than a small one, so the APR comparison is your main defense. Use the offer comparison calculator before you sign.

How Georgia compares with its neighbors

On the $2,000 two-year loan, North Carolina caps the price at about 35% APR, Florida at about 37% and Tennessee at about 49%, while Alabama and South Carolina have no numeric cap. The state rules map shows every state side by side.

Who needs a license

A lender making loans of $3,000 or less to Georgians needs an installment lender license from the DBF, which also runs a license search on its website. The DBF's rules for these lenders are in chapter 80-14 of the Rules of the Department of Banking and Finance.

• Banks and credit unions answer to their own charters and banking regulators, and a bank may charge the rates its home state allows.
• Online lenders that partner with a bank may make loans through that bank. Ask who the lender of record is, since that decides which rules apply.
• Payday and title loans follow other Georgia laws. Our sister site Lendmira covers them on its Georgia page.

Check a lender and file a complaint

1. 1 Look up the license in the DBF's installment lender license search before you apply for a loan of $3,000 or less.
2. 2 Keep the loan papers: the Truth in Lending disclosure, the agreement and any messages about fees. How to verify a lender lists other warning signs.
3. 3 Contact the DBF at (770) 986-1633 or toll-free (888) 986-1633, Monday to Friday, 8:00 a.m. to 5:00 p.m. Eastern Time, or at 2990 Brandywine Road, Suite 200, Atlanta, GA 30341-5565.
4. 4 Send a complaint to the CFPB as well if the lender is a bank or a bank partner, or if you are unsure who regulates it.

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