Georgia Car Title Loans - The High Price of Borrowing Money
Consumers, beware, lest you fall prey to the "instant mentality" - instant credit, instant food, instant marriage, instant divorce, instant loan… why? In the state of Georgia, the law allows pawnshops making Georgia car title loans to charge up to 25% per month for up to ninety days and after which they are allowed to charge a maximum of 12% per month. This makes a Georgia title auto loan nothing short of usury! The owner of the pawnshop can even sell a car based on non-payment and they can keep all the proceeds of the sale of the car whatever the amount of the loan. Georgia Car Title Loans - Can you 'Afford' this Type of Loan? For example, if I need a quick loan, I can use my car title as collateral. All I need is a clean title and a valid address. For a $600.00 loan, I will be charged a monthly interest of $150.00 with no decrease on the principal amount of $600.00. Over the next 3 months, the loan accrues a $450.00 total interest, but I still owe the pawnshop $600.00. If I could not pay my car loan after a set period, the pawnshop can sequester my car and sell it without any public sale. If my car sells, for say $4,000.00, under Georgia law, the pawnshop gets to keep the entire amount, even if my car loan was only for $600.00. This type of loan practice can really damage, instead of improve, the business climate and Georgia's statute on pawnshop transactions on car title loans should be repealed. The fact is, most consumers who avail of these types of loans are usually desperate and couldn't get credit elsewhere. This pushes them deeper and deeper into debt. This is a vicious cycle that is becoming more prevalent in highly urbanized areas. This calls for a more thorough study on our financial and business structure indeed! Written by: Anthony Recto
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