Late loan payments in Georgia

A missed loan payment is a contractual default, but it is not by itself a crime. A bank may claim sums allowed by the contract and law, report accurate arrears to a credit bureau, and use lawful court or enforcement procedures.

Interest and penalty limits

Article 625 of Georgia’s Civil Code caps the annual effective interest rate at 50%. Unless legislation provides otherwise, the daily aggregate of fees, penalties and financial sanctions for breach may not exceed 0.27% of the outstanding principal. Ask for a written breakdown of principal, ordinary interest, default interest, penalties, fees and legal costs.

What may a bank do?

• demand principal and lawful contractual charges;
• report accurate arrears and pursue a guarantor or co-borrower within their contract;
• sue or rely on another valid enforcement instrument;
• during enforcement, pursue attachable accounts, income and property;
• enforce a mortgage only through the contractual and statutory sale process.

What is prohibited?

• threatening arrest for an ordinary civil debt;
• harassment, insults, deception or impersonating a court, police or bailiff;
• unlawful disclosure to relatives, neighbours or an employer;
• taking property without a valid legal process;
• charging items absent from the contract/law or above statutory caps.

Practical response

Request a full statement, submit a realistic restructuring proposal in writing and keep proof. Do not ignore court, notarial or enforcement notices. Complain first to the institution and then through the National Bank of Georgia’s consumer-protection channel. Restructuring is generally not an automatic entitlement and can increase total interest.