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2006 Georgia Code - 7-4-2
7-4-2. (a)(1)(A) The legal rate of interest shall be 7
percent per annum simple interest where the rate percent is not
established by written contract. Notwithstanding the provisions of
other laws to the contrary, except Code Section 7-4-18, the parties
may establish by written contract any rate of interest, expressed
in simple interest terms as of the date of the evidence of the
indebtedness, and charges and any manner of repayment, prepayment,
or, subject to the provisions of paragraph (1) of subsection (b) of
this Code section, acceleration, where the principal amount
involved is more than $3,000.00 but less than $250,000.00 or where
the lender or creditor has committed to lend, advance, or forbear
with respect to any loan, advance, or forbearance to enforce the
collection of more than $3,000.00 but less than $250,000.00.
(B) Where the principal amount is
$250,000.00 or more, or the lender or creditor has committed to
lend, advance, or forbear with respect to any loan, advance, or
forbearance to enforce the collection of $250,000.00 or more, the
parties may establish by written contract any rate of interest,
expressed in simple interest terms or otherwise, and charges to be
paid by the borrower or debtor. (C) Nothing contained in this subsection shall
be construed to prohibit the computation and collection of interest
at a variable rate or on a negative amortization basis or on an
equity participation basis or on an appreciation basis.
(2) Where the principal amount
involved is $3,000.00 or less, such rate shall not exceed 16
percent per annum simple interest on any loan, advance, or
forbearance to enforce the collection of any sum of money unless
the loan, advance, or forbearance to enforce the collection of any
sum of money is made pursuant to another law. (3) As used in this Code section, the term
'interest' means a charge for the use of money computed over the
term of the contract at the rate stated in the contract or
precomputed at a stated rate on the scheduled principal balance or
computed in any other way or any other form. Principal includes
such charges to which the parties may agree under paragraph (1) of
this subsection. Amounts paid or contracted to be paid as either an
origination fee or discount points, or both, on any loan secured by
an interest in real estate shall not be considered interest and
shall not be taken into consideration in the calculation of
interest and shall not be subject to rebate as provided in
paragraph (1) of subsection (b) of this Code section.
(b)(1) Upon acceleration of the
maturity of any loan, advance of money, or forbearance to enforce
the collection of any sum of money upon which interest has been
precomputed, unearned interest shall be rebated to the debtor in
such amount as would result in the rate of interest earned being no
greater than the rate of interest established by the original
contract. In the case of a loan in which the principal and the
interest for the entire term of the loan are included in the face
amount of the loan and the loan is to be paid back in weekly,
monthly, quarterly, semiannual, or yearly installments, with the
interest and principal portions of each installment determined
under the pro rata method, any such rebate shall be determined on
the pro rata method. (2)
Unless stipulated in the contract, there shall be no prepayment
penalty. (c) Nothing
contained in this Code section shall be construed to amend or
modify the provisions of Chapter 3 of this title, the 'Georgia
Industrial Loan Act,' Article 1 of Chapter 1 of Title 10, the
'Retail Installment and Home Solicitation Sales Act,' Chapter 5 of
this title, 'The Credit Card and Credit Card Bank Act,' Chapter 22
of Title 33, the 'Insurance Premium Finance Company Act,' Part 5 of
Article 3 of Chapter 12 of Title 44, relating to pawnbrokers, and,
except as provided in Code Section 7-4-3, Article 2 of Chapter 1 of
Title 10, the 'Motor Vehicle Sales Finance Act.'
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