Georgia Installment Lender Bond: A Comprehensive Guide
This guide provides information for insurance agents to help installment lenders obtain Georgia Installment Lender Bonds
At a Glance:
- Lowest Cost: $500 per year or $50 per month, based on the applicant’s credit
- Bond Amount: $25,000 plus an additional $5,000 per branch location to a maximum of $100,000
- Who Needs it: All installment lenders operating in Georgia
- Purpose: To ensure the public will receive compensation for any damages should the installment lender fail to comply with licensing law
- Who Regulates Installment Lenders in Georgia: The Georgia Department of Banking and Finance
Georgia Statute 80-14-4-.01 requires all installment lenders operating in the state to obtain a license with the Department of Banking and Finance. The Georgia legislature enacted the licensing laws and regulations to ensure that installment lenders engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, installment lenders must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the Georgia Installment Lender Bond?
Georgia requires installment lenders to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the installment lender fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the installment lender breaks licensing laws.
How Can an Insurance Agent Obtain a Georgia Installment Lender Surety Bond?
BondExchange makes obtaining a Georgia Installment Lender Bond easy. Simply login to your account and use our keyword search to find the “installment” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Georgia Installment Lender Bond?
Surety companies will run a credit check on the owners of the installment lending company to determine eligibility and pricing for the Georgia Installment Lender bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Georgia Installment Lender Bond Cost?
The Georgia Installment Lender surety bond can cost anywhere between 2% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $25,000 bond requirement.
$25,000 Installment Lender Bond Cost
|Credit Score||Bond Cost (1 year)||Bond Cost (1 month)|
|600 – 649||$1,000||$100|
|550 – 599||$1,875||$188|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Georgia Define “Installment Lender?”
Georgia Statute 7-3-3 defines an installment lender as any business that advertises, solicits, offers or makes an installment loan in the amount of $3,000 or less.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Installment Lenders Apply for a License in Georgia?
Installment lenders in Georgia must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.
License Period – The Georgia Installment Lender License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Installment lenders must purchase and maintain a $25,000 surety bond, plus an additional $5,000 per branch location to a maximum of $100,000
Step 3 – Request NMLS Account
The Georgia Installment Lender License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.
Step 4 – Complete the Application
All Georgia Installment Lender License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
- A primary company and consumer complaint contact
- Company business plan containing the following information:
- Marketing strategies
- Target markets
- Fee schedule
- Operating structure the applicant intends to employ
- Convenience and Advantage Questionnaire
- Company formation documents
- Management chart indicating the company’s hierarchy
- Organizational chart detailing the company’s ownership structure
- Verification of Lawful Presence Affidavit
- State background check authorization
*License applicants may be required to submit financial statements at the discretion of the Department of Banking and Finance
Installment lenders must pay the following fees when submitting their license application:
- $500 license fee
- $250 application fee
- $36.25 background check fee (per person)
- $15 credit report fee (per person)
How Do Georgia Installment Lenders Renew Their License?
Installment lenders can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Georgia Installment Lender License expires on December 31 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Georgia Installment Lender License?
The State of Georgia does not require installment lenders to obtain any form of liability insurance as a prerequisite to obtaining a business license. Installment lenders must purchase and maintain a $25,000 surety bond, plus an additional $5,000 per branch location to a maximum of $100,000.
How Do Georgia Installment Lenders File Their Bond?
Installment lenders should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the installment lending company. The surety company should include the following information on the bond form:
- Legal name and NMLS number of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
- Witness signatures for the principal and surety company
What Can Georgia Installment Lenders Do to Avoid Claims Against Their Bond?
In order to avoid claims made against their bond, installment lenders in Georgia must follow all license regulations in the state. Including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Properly account for all funds received from consumers
What Other Insurance Products Can Agents Offer Installment Lenders in Georgia?
Georgia does not require installment lenders to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Georgia Installment Lender Customers?
The NMLS conveniently provides a public database to search for active installment lenders in Georgia. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.