Regular “payday” loans have been illegal for a while now in Georgia, but that doesn’t mean that residents of this state are free from predatory lenders who have swooped in to replace them.
We’re talking about lenders who market high-interest installment loans to folks who are struggling financially. Many of these installment loans are thinly disguised payday loans with a longer repayment plan that’s designed to make them legal under the state laws.
Lender associations argue that these kinds of short-term, micro-loans are a necessity for people who don’t have access to regular financing and don’t have any savings built up. On the surface, installment loans seem like they’re better than payday loans, with interest capped at a mere 36%. That’s a bargain compared to the 300% annual percentage rate you can see on a payday loan.
Except the lower interest rate is really an illusion. Many borrowers are forced to recycle their loans when they come due, and it’s not unusual for someone to end up paying more than 100% over the course of a year.
Even worse, lenders often cajole borrowers into setting up direct payments — which means that if you can’t afford to make a payment when it comes due, they can just reach into your wallet and take it. That means you lack the freedom to juggle your bills around when things get tough. You can also end up owing your bank if your lender ends up over-drafting your account.
What can you do if your installment loans and other debts have made paying your other bills impossible? It may be time to talk about filing for bankruptcy. Talk to an experienced attorney as soon as you can about your options.