Before you embark on the quest for a cash advance or payday loan, you should understand the process for getting such a loan and know the regulations in your state. Many states have no laws or regulations regarding payday or cash advance loans. Others have prohibited them altogether or made them so highly regulated that doing business of that nature is just not feasible. Georgia is a good case in point.
Some In the Industry Practice Usury
Some payday or cash advance lenders have become notorious for charging sky-rocket interest rates and dealing very aggressively with those who are getting behind or defaulting on their payments. As borrowers try to meet payments by requesting extensions, interest rate debts just drag them deeper and deeper into a financial pit.
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Some States and Consumer Advocacy Groups Seek Usury Laws
These practices have caused banner stories in local news media and have caused consumer advocate groups to lobby heavily against these lenders in state legislatures. As a result, in some states, if not actually banned, a cap on lending interest rates has been placed so low that it is not worth it to do business there. These so-called usury laws set a very low limit on percentage rates charged. Usury means having an unconscionable or exorbitant rate of interest on loans.
Georgia Sets an Unfair Standard
A majority of states allow and regulate payday lending to various degrees. About a quarter of the states have no laws regarding this market at all. Payday lending is a billion-dollar industry in the U.S. In spite of this, Georgia has a history of legislation intended to thwart high-cost payday or cash advance loans. Its first piece of legislation was called the Georgia Industrial Loan Act (GILA) enacted in 1955. The statute required state registration of lenders and imposed very strict interest levels to combat usury on small short-term loans.
Sky-Rocket Penalties
Lenders of this nature are not allowed to make loans larger than $3,000 and can charge no more than 8% interest. This made the cost heavy for lenders, but the state was not successful in demolishing the industry until is passed the Payday Lending Act in 2004. This was an amendment to GILA and dramatically increased fines and criminal penalties. Under the amendment, violators could face felony and racketeering charges along with fines up to $25,000 per charge and up to 25 years in prison.
Alternatives for Georgia and Similar States
If you are a citizen of Georgia or a similar state, payday or cash advance loans are not available. Because of the predatory lending and debt practices by a few nasty lenders that forced the banning of the industry, everybody has lost. If you do go shopping for a quick and easy cash infusion from more traditional lenders, do not expect to find any who are willing. If you do, be sure they have low interest rates (APR or annual percentage rates).
Do Not Give Up
If you are looking for a loan to meet the payment to another creditor, you should contact that lender immediately and tell them about the problem and see if something can be worked out. You may be able to ask your boss or your company for an advance on wages. That will result in a lower paycheck next pay period, but at least you will have your present cash need satisfied. Consider putting in overtime or finding a part-time job. Check with your local or state governments to see if any hardship lending programs are in place. Or perhaps they can advise you on other options.
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