Auto Title Loan Laws and Regulations

An auto title loan is ideal for consumers who need fast cash but have credit challenges that keep them from getting approved elsewhere. They’re easy to get approved if the vehicle is registered to your name and you have the title handy. But they can come with steep interest rates because of the nature of the loan, and may not be available in your state. And if they are an option, each state has different regulations you should be mindful of.

Car Title Loan Laws by State – Know Your Rights!

Below is a comprehensive listing of title loan laws by state:  

Alabama

There are no maximum loan limits for title loans in the state of Alabama, but loan term is limited to one month. The interest rate caps out at 25 percent and the title is required as a pawn, and not a lien on the vehicle.

Arizona

Maximum loan limits do not exist, but the term of the loan is determined by the lender. An interest rate of 17 percent is assessed on a monthly basis for loans up to $500. Loans between $501 and $2,500 are capped at 15 percent, and loans between $2,501 and $5,000 are capped at 13 percent. Any loan granted for over $5,000 is capped at 10 percent in interest. And if the loan remains outstanding for ten days following the due date, the lender has a right to assess a late fee of up to five percent.

Delaware

Interest is not capped on title loans Delaware, so the lender can charge as high of an APR as they see fit. To secure the loan, an actual title is required and the loan term can span up to 180 days, including roll-overs.

Georgia

Georgia law limits the term for title loans to 30 days with the option to extend, but there are no caps on the loan amount. The interest rate is also capped at 25 percent for the first three months of the loan, but decreases to 12.5 percent thereafter. A lien fee also applies.

Idaho

With a valid title in hand, you can get a title loan equal to or lesser than the value of the retail price of your vehicle in Idaho. The loan term is limited to 30 days and there is no cap on the interest rate the lender can assess. If you decide to exercise the option to renew the loan, 10 percent of the principal will be added to the loan balance on the third renewal.

Illinois

Title loans in Illinois cannot exceed $4,000 or 50 percent of the borrower’s monthly income, but there is no limit on the amount of interest that can be assessed. You must hand over a copy of your title to secure a loan, and only one renewal is permitted once you’ve paid at least 20 percent of the principal.

Mississippi

You can borrow up to $2,500 in Mississippi with a valid title. The interest rate is limited to 25 percent, and the loan term cannot exceed 30 days. However, a renewal is permitted is you’ve paid at least 10 percent of the principal.

Missouri

Title loans of up to $5,000 are allowed in Missouri and the loan term cannot be less than 30 days. Renewals are permitted, but you must pay at least 10 percent of the loan balance once you’ve reached the third renewal. You must have a clear title to secure a title loan and there is no cap on the amount of interest that the lender can assess.

Nevada

Nevada allows lenders to extend title loans that or less than or up to the amount of the vehicle’s fair market value. The loan term is set for 30 days and can be renewed up to six times, but there is no limit to the interest the lender can charge. If the borrower decides not to hand over the title, the lender must be added as a lienholder so they can have rights to the vehicle.

New Hampshire

Borrowers have access to a whopping $10,000 title loan in New Hampshire and the original term is limited to one month. If a loan renewal is needed, the borrower can exercise this option up to 10 times once they’ve paid down 10 percent of the loan. The maximum interest rate is 25 percent and a title is required to secure a loan.

New Mexico

Single installment title loans of up to $2,500 are permitted in New Mexico. The title of the vehicle is required to secure the loan and there is no cap on the interest charged by the lender. However, a late fee of five percent applies if the loan hasn’t been paid within 10 days of the original due date.

Tennessee

Title loans in Tennessee are capped at $2,500 with a loan term of 30 days with an interest rate of 20 percent of the loan plus two percent per month. To qualify for a loan, a clear title is required. And should you request a renewal, a fee of 5 percent of the original principal plus interest and fees is charged the third time around.

Texas

If you have the title to your vehicle, you can take out a single payment or installment title loan in Texas. There are no caps on the loan amount or fees, but the interest is limited to 10 percent.

Utah

Title loans of up to the fair market value of your vehicle are allowed in Utah, but you may only take out one loan at a time. Loans are renewable and there are no set payment terms, but the  interest rates are not capped and the title is required to qualify for the loan.

Virginia

To qualify for a title loan in Virginia, the lender requires a copy of the physical title and a lien on the vehicle, which must be filed with the Department of Motor Vehicles. The maximum amount you can borrow is limited to 50 percent of the vehicle’s fair market value, and the APR is capped out at 22 percent per month on loans up to $700. (It decreases to 18 percent if the loan is between $701 and $1,400 and 15 percent if the loan is over $1,400). Title loans must be repaid in equal monthly installments for a period spanning between 120 days and 12 months, and rollovers and renewals are prohibited.

Wisconsin

You can borrow up to 50 percent of your vehicle’s value, capped out at $25,000, in Wisconsin. Loan terms cannot surpass six months, but the lender has no restrictions on the amount of interest that can be charged on the loan.

The Bottom Line

Title loan laws vary by state, and some states don’t have regulations in place because these types of loans are prohibited so it’s important to know your rights. If this is an option that is available in your state, be sure to get acclimated to the laws and read the fine print to ensure the loan terms are compliant with the regulations. Most importantly, shop around and compare your options to ensure the loan you select is the best fit for your financial situation.