Legal and Regulatory Considerations for Car Loans in Georgia

In Georgia and the rest of the United States, people often turn to car loans to finance their new car. These loans are provided by various institutes like banks or credit unions and help you buy your dream vehicle. However, as with any loan, understanding the legal and regulatory implications is vital.

Regulations exist both on a federal and state level to protect lenders and borrowers alike, so you must know Georgia’s laws on car financing before getting an auto loan. By being well-informed about these aspects, you can make better decisions, secure favorable terms, and safeguard your rights throughout the term. Here are some legal considerations you must know in Georgia:

Loan Agreement Requirements

Let’s say you want to buy a new car, such as an Infiniti Q50 in Atlanta, GA. Before you get into a loan agreement to finance it, ensure your lender has given you information about:

• the annual percentage rate
• the total cost of borrowing, including interest and fees
• the payment schedule and total payments
• prepayment policies
• late payment fees
• the loan term

Refusal to share this information entails violating the federal Truth in Lending Act (TILA) applicable in Georgia as well as the state-specific Georgia Motor Vehicle Sales Finance Act; you can take the lender to court in this case.

These laws ensure that you make informed decisions by comparing offers from different lenders more easily, provide consumer protection, and, for certain loans, give you the right to rescind the agreement within three days of signing.

When formalizing contracts, remember that they are legally binding and include all discussed information with the full legal names and contact information of yourself and the lender. Do not sign in case of any informational discrepancies.

Fair Lending Practices

Both Federal and state laws in Georgia, such as the Georgia Fair Lending Act, regulate the lending procedure to be fair. The Equal Credit Opportunity Act (EOCA) prevents lenders from discriminating based on protected categories, like race, gender, religion, or sexual orientation, which is enforced by the Georgia Department of Banking and Finance.

The Fair Credit Reporting Act (FRCA) regulates car financing based on credit reports. As per the FCRA, consumers are entitled to one free credit report annually from major credit reporting agencies. Additionally, if there is incorrect information on their report, the act empowers them to file a dispute with the credit reporting agency and have it investigated and corrected within 30 days. Lenders cannot retaliate against consumers for disputing information as per FRCA.

Protections for Lenders

In Georgia, car financing borrowers have certain rights and protections under the law. They include the right to rescind, which empowers them to cancel a loan in cases of fraud or non-disclosure of loan terms under TILA. If a borrower defaults on the car loan, the lender can repossess the vehicle. In Georgia, the lender does not need to give advance notice before repossession; however, they cannot use force or threats or remove the vehicle from a locked garage without the owner’s consent.

Endnote

Financing a new car on your budget can be tricky and so most people get auto loans. They enable you to raise the capital needed to get your dream car, which you pay back over a pre-agreed period. However, it is important to know the legal and regulatory considerations such as the loan agreement requirements, fair lending practices, and your rights as a borrower, so you are not exploited.