TITLE PAWN FREEDOM
1800NewDeal offers to pay off high interest title pawns and provide borrowers with a lower interest rate and principal reducing payments that will pay off the loan. Customers may save in interest and be debt free much sooner.
TITLE PAWN TRAP
A traditional title pawn transaction is typically issued for a 30 day period, after which the entire amount is due in full. If the customer is unable to pay off the full amount, title pawn companies will “roll over” the ticket for another month, usually at a high rate of interest. As payments are made, all the proceeds are generally applied to interest and the principal balance never reduces thus creating a never-ending cycle of indebtedness.
HIGH COSTS OF TITLE PAWN
In Georgia, the interest rate title pawn companies are allowed to charge is capped by law at 25 percent monthly (300 percent annually) for the first three months and 12.5 percent monthly after that (150 percent annually). This means a combined maximum yearly interest rate of 187.5 percent. (1)
In the case of title pawns, state law [O.C.G.A. Section 44-12-138(b)(3)] requires the pawnbroker to provide you the following written statement when you pawn your vehicle: Failure to make your payment as described in this document can result in the loss of your motor vehicle. The pawnbroker can also charge you certain fees if he or she actually repossesses the vehicle. (2)
(1) (2) Georgia Department of Law, Consumer Protection Unit http://www.consumer.ga.gov/consumer-topics/title-pawns-and-cash-advances