Payday Loans and Cash Advance in Georgia

Prohibited; licensed installment loans only. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Georgia.

Is a Cash Advance Legal in Georgia?

Payday loans are illegal in Georgia, and the state treats making them as a crime rather than a licensing problem. The Georgia Payday Lending Act, O.C.G.A. 16-17-1 and following, makes it unlawful to be in the business of making, offering or arranging loans of $3,000 or less unless the lender fits a listed exception, such as a bank, a credit union or an installment lender licensed under the Georgia Installment Loan Act. A violation is a misdemeanor of a high and aggravated nature, punishable by up to a year in jail and a $5,000 fine, and a fourth conviction is a felony. The loan itself is void, the lender is barred from collecting, and the borrower can sue for three times the interest and charges. The Department of Banking and Finance and the Attorney General both say the same thing on their consumer pages: payday loans are illegal here. What a Georgia resident can get is a small installment loan from a lender licensed under O.C.G.A. 7-3, capped at $3,000, up to 36 months and 15 days, with interest of no more than 10 percent a year plus a limited loan fee and a $3 monthly maintenance charge.

The governing law is Georgia Payday Lending Act, O.C.G.A. 16-17-1 et seq.; Georgia Installment Loan Act, O.C.G.A. 7-3-1 et seq. (O.C.G.A. 16-17-2, 16-17-3, 7-3-11, 7-4-2, 7-4-18).

Loan Limits and Terms in Georgia

The ban in O.C.G.A. 16-17-2 covers loans of $3,000 or less made by anyone who is not an exempt lender, and it reaches loans made by mail, online or by phone. It also closes the usual workarounds: a contract may not choose another state's law, and an out-of-state company that uses a local agent is treated as the lender if it holds the predominant economic interest. Licensed installment lenders are exempt, and their pricing is set by 7-3-11: 10 percent a year on the face amount for the whole term, a one-time loan fee, and $3 a month. Because the loan fee is flat, a very short installment loan carries a high annual rate even though the dollars are small. Anyone charging more than 5 percent a month commits criminal usury under 7-4-18.

What a $300 Loan Costs in Georgia

Payday loans are illegal, so this is the most a licensed installment lender could charge under O.C.G.A. 7-3-11 on a $300 loan repaid after 14 days, treated as half a calendar month. Interest: $300 x 10% x 0.5 / 12 = $1.25. Loan fee: 8% of the first $600 = $300 x 0.08 = $24.00. Maintenance charge: $3 for one month. Total charges $1.25 + $24.00 + $3.00 = $28.25. APR = 28.25 / 300 x 365 / 14 = 2.46, or about 246 percent. Over three months the same loan costs about $40.50, roughly 54 percent APR, because the flat fee is spread over more time.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Georgia

• Making, offering or arranging a loan of $3,000 or less without an exemption is a misdemeanor of a high and aggravated nature, with up to one year in jail and a $5,000 fine per loan, and a fourth conviction is a felony (O.C.G.A. 16-17-2).
• A payday loan made in violation of the Act is void from the start, the lender is barred from collecting any of it, and the borrower may sue for three times the interest and other charges (O.C.G.A. 16-17-3).
• A lender cannot escape Georgia law by writing another state's law into the contract, and an out-of-state company working through a local agent is treated as the real lender if it holds the predominant economic interest (O.C.G.A. 16-17-2).
• Since July 1, 2020 every installment lender making loans of $3,000 or less must be licensed by the Department of Banking and Finance, and a loan from an unlicensed lender that needed a license is void (O.C.G.A. 7-3-2 and 7-3-50, DBF guidance).
• Licensed installment lenders may charge no more than 10 percent a year on the face amount, a loan fee of 8 percent of the first $600 and 4 percent of the excess, and $3 a month, and the term may not exceed 36 months and 15 days (O.C.G.A. 7-3-11).
• Charging more than 5 percent a month on any loan is criminal usury, a misdemeanor under O.C.G.A. 7-4-18, and general contracts of $3,000 or less are capped at 16 percent simple interest under O.C.G.A. 7-4-2.
• You can check whether a lender holds a Georgia installment license through NMLS Consumer Access, and the Department accepts complaints about unlicensed lenders by email at [email protected] (DBF guidance).

Complaints and licence checks go to the Georgia Department of Banking and Finance: 770-986-1633, dbf.georgia.gov, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Georgia

There are no legal payday storefronts in Georgia, so almost every payday offer a resident sees comes from a website. The Department of Banking and Finance issued consumer guidance in January 2021 after receiving complaints about online lenders offering loans under $3,000 at rates well above the 10 percent the Installment Loan Act allows. Many of those lenders are located in other states or outside the country, or claim tribal ownership. The Department's position is that being outside Georgia does not excuse a lender from Georgia law: a loan under $3,000 from a company that should hold a Georgia license but does not is void under O.C.G.A. 7-3-50, and where the loan is really a payday loan the lender has no right to collect principal, fees or charges under 16-17-3. The Department cannot intervene in an individual dispute, but it uses complaints in enforcement and directs borrowers to the CFPB complaint portal as well. Before dealing with any online lender, look it up on NMLS Consumer Access; if there is no Georgia installment license, the loan is not one the state recognizes.

Alternatives If a Payday Loan Is Not the Right Fit

The legal small-dollar product in Georgia is an installment loan from a lender licensed under the Georgia Installment Loan Act. The cap is $3,000, the term can run up to 36 months and 15 days, and the price is limited to 10 percent a year on the face amount plus a loan fee of 8 percent of the first $600 and 4 percent of anything above that, plus $3 a month. Banks and credit unions are exempt from the payday ban and can lend under their own rules; federal credit unions offer Payday Alternative Loans with federal caps. Credit card cash advances, employer payroll advances and earned wage access programs are other options that avoid the illegal market. For a bill you cannot cover, Georgia's Division of Family and Children Services and local community action agencies handle energy and emergency assistance, and utilities and landlords will often agree to a payment plan if asked before the due date.

Compare the installment loan and payday alternative loan options before you decide.

Cities We Cover in Georgia

• Atlanta, GALocal cost of living, ordinances and help lines
• Columbus, GALocal cost of living, ordinances and help lines

Frequently Asked Questions

Nearby States

• FloridaThe fee cap, a worked example and the regulator to call in Florida.
• AlabamaThe fee cap, a worked example and the regulator to call in Alabama.
• TennesseeThe fee cap, a worked example and the regulator to call in Tennessee.
• North CarolinaThe fee cap, a worked example and the regulator to call in North Carolina.
• South CarolinaThe fee cap, a worked example and the regulator to call in South Carolina.