Classic Car Loan - Terms to be Regulated in Georgia

The use of a car title loan may not be the answer you are looking for if you are seeking a classic car loan. The Georgia car title loan industry has recently created some noise due to complaints from borrowers. This resulted in discussions on how to regulate the car title loan industry in Georgia.

Classic Car Loan - The Issue

A car title loan is a small loan granted to borrowers who need money for a short term. The money received from a car title loan is usually paid for within a couple of weeks. With a car title loan, the borrower's certificate of ownership to the car is taken by the lender as security for the loan. Car title loans also come with high interests, and so usually hide behind names like "title pawn", "sale and leaseback", or "motor vehicle equity lines of credit".

It is quite unfortunate that some car title lenders in Georgia may have gone overboard with their terms for charging Georgia residents for their loans. One complaint, in particular, states that the borrower still owed the lender as much as she originally borrowed from the lender even after two years had already elapsed and even after the borrower had already paid over twice the amount of her loan.

This led to authorities and government officials seriously looking into the car title loan industry in Georgia, so that it can be better regulated, and so borrowers or consumers don't get abused. One possibility being considered is the implementation of a limitation to the length of time that a consumer should pay the triple-digit interest before the money is applied to the principal. Under consideration too is how the interest rates on these car title loans can be reduced from the current rates applied by lenders, which is 25% per month for the first three months and 12.5% per month thereafter.

Even as the lenders appealed that this move may put them out of business, a senator still went ahead in introducing a legislation that would decrease car title loan interest rates down to 60% per year, the acceptable loan interest rate in Georgia. Surely, this is only the beginning of efforts to reform the car title loan industry in Georgia.