Georgia, unlike most states, considers title loans to be pawn transactions. Title pawnbrokers are licensed and monitored by local police or sheriff's departments, and aren't subject to banking laws and regulations that govern other lending. A title pawn in Georgia essentially is subject to the same rules that would apply if someone took a television to a pawnshop.
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Pawn Transactions
Georgia law treats a title pawn as a pawn of the car itself for a sum of money. However, unlike other property, the pawnbroker doesn't need to have possession of the car itself. He only needs the title. Like other pawn transactions, the pawnbroker uses the car as security to give his customer cash. The customer returns in 30 days with the total amount given, plus interest and fees, or forfeits her property.
No Guaranteed Renewal
For the initial 30-day period, a Georgia pawnbroker may charge fees and interest equal to as much as 25 percent of the total amount of cash exchanged. For example, a customer wanting to pawn her car title for $200 can expect to pay $250 after 30 days to get her title back. Although the contract may be renewed for additional 30-day periods, Georgia pawnbrokers are not required by law to renew the contract and may demand payment in full after 30 days.
Repossession on Default
If the customer doesn't pay the pawnbroker at the end of the 30-day period, he can repossess the car the next day. He doesn't need to get permission from police or the courts to do this. The customer who pledged her car title loses any ownership interest in the car the instant she defaults on the pawn contract. Once the pawnbroker repossesses the vehicle, Georgia law requires a 30-day grace period during which he cannot sell the car, and the vehicle's former owner retains certain rights during this period.
Payment in Full
After repossession, the customer can get her car back by paying the pawnbroker all the money she owes him. This includes not only the principle, fees and interest, but also any repossession fees. Depending on how far away the car is located from the pawnbroker, he may charge a repossession fee of as much as $250, plus a storage fee of $5 a day for each day he held the car during the grace period. If the customer is unable to pay this amount and the grace period elapses, the pawnbroker may sell the car and keep any profit he makes off of the sale.
