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Title Loan Laws And Disclosures For Each State
Premier Title Loans is dedicated to providing transparent and responsible title loan lending services. Please check your specific state disclosures before committing to a loan with a licensed lender. We do not offer access title loans in every state, and regulations regarding interest rates, repayment terms, and loan amounts are constantly changing. We may act as a broker or referral service in states we don’t service. In that case, your loan will be underwritten and serviced by a licensed lender in that state. Last Updated: July 16, 2024.
Alabama
Alabama allows short-term loans, including car title loans, under the Pawn Shop Act. Under the Pawn Shop Act, a title lender is considered a pawnbroker in Alabama and must be licensed within the state to offer secured loans.
A title loan lender may charge a maximum of 25% of the loan amount per month in interest. If a title lender doesn’t receive a payment after 30 days from the time the original contract is signed, the vehicle becomes their property.
Alabama has very few restrictions regarding title loans and short-term lending overall. However, lenders do have to pay the state an annual fee to maintain their licensing and fully disclose title loan terms to consumers.
Alaska
Title loans are illegal under state law in Alaska. There are regulations related to short-term payday loans as well. In Alaska, payday loans have a maximum loan amount of $500, a minimum loan term of 14 days, and a maximum APR of 36%.
Arizona
Arizona allows title loans, but the current state regulations make it challenging to get approved for a loan. The maximum finance rates depend on how much a loan is for. For example, if the loan is $500 or less, there is a maximum monthly finance rate of 17%. For a loan of more than $500 but no more than $2,000, the cap is 15%. For a loan of more than $2,000 but not more than $5,000, the monthly finance rate can be up to 13%; for anything more than $5,000, it’s 10%.
A lender can charge a late fee of up to 5% of the unpaid installment loan balance if it’s not paid in full on the 10th day after the due date.
Arkansas
Title loans aren’t legal in Arkansas, and neither are payday loans.
California
It is legal to get an auto title loan in California. As of 2020, title loans offered between $2,501 and $10,000 have a maximum interest rate of 36% plus the federal funds rate. The annualized interest rate for loans over $10,000 offered within California ranges from 70% to 100% and sometimes even higher.
The repayment terms can be as short as 30 days or extended for several months or years. If someone doesn’t repay the loan as agreed, the lender has the legal right to repossess the vehicle in California, sell it and recover the debt.
Colorado
Car title loans aren’t legal in Colorado.
Delaware
Car title loans are legal in Delaware. The maximum amount someone can borrow is not limited, and interest costs are not capped. However, the terms are limited to up to 180 days, including rollovers.
Under Delaware state law, the lender must provide a specific written disclosure in a “conspicuous” format. The borrower and lender must also work out an agreement before the car is repossessed for nonpayment. The borrower has at least ten business days to accept a workout agreement before the lender takes possession of the vehicle.
District of Columbia
Title loans are prohibited in the District of Columbia.
Florida
In Florida, a title lender operates under the state consumer financing laws. They have to pay additional fees like credit insurance fees. Under the Florida Title Loan Act, lenders must be licensed by the Office of Financial Regulation. To receive a loan, the borrower and lender must sign a written agreement for the loan amount and your interest rate.
The loan agreement must explain that if you don’t pay the loan back as agreed, the lender can take your car, sell it, and keep the sales amount up to what you owe, plus reasonable expenses to cover the costs of repossession and sale.
Until the car is sold, you can still get it back if you pay the loan in full and any reasonable expenses. If you’re the borrower, you must be notified at least ten days before the sale, and the lender must give you an accounting of what you owe.
Georgia
Title loans, known as title pawn loans within the state, are legal in Georgia. They last 30 days and can be extended beyond that if both the borrower and the pawnbroker agree.
If you don’t repay or extend the loan, a pawnbroker in Georgia can immediately repossess your vehicle. If it’s repossessed, you have 30 days to get it back. You’d have to pay the loan amount, plus fees and interest, to get your vehicle back. You must pay the cost of repossession up to $250, storage fees, and any other fees for handling the car.
If you can’t repay it within 30 days of repossession, a pawnbroker can legally sell and keep it, even if it’s more than you owe.
You can only be charged up to 25% monthly interest for the first three months. After three months, you can be charged 12.5% each month, so the maximum yearly interest rate is 187.5%.
The Military Lending Act protects active-duty military personnel from excessive interest rates, capping the annual interest rate at 36%.
Hawaii
Title loans and payday loans aren’t allowed in Hawaii.
Idaho
Idaho allows title loan lenders, with some restrictions. One such limitation is that the title loan can only be up to 30 days in length. Still, a loan renewal can occur unless the debtor has paid everything, given up possession of the titled property to the lender, or the title lender has let the debtor know in writing that the agreement won’t be renewed. For the third renewal, 10% of the principal must be paid with each renewal going forward.
The maximum loan limit is up to the vehicle’s retail value, and costs aren’t capped.
If the loan isn’t repaid within the agreed terms, the lender can sell the vehicle, but the borrower gets any remaining funds.
Illinois
While title loans are legal in Illinois, there are some legal requirements and restrictions. For example, in 2009, the state passed the Illinois Consumer Installment Loan Act, which requires that data about every loan secured by a vehicle title be entered into a state database. Then, if the loan meets consumer protection standards, it can be authorized.
The principal amount of a title loan can be, at most, $4,000. The loan payments can’t be more than 50% of the borrower’s gross monthly income, and balloon payments aren’t allowed. The title loan has to be repaid in equal installments.
A consumer can only receive one loan. The only type of loan a title loan lender can offer is refinancing an existing title loan. The refinance’s principal balance must be over 20% less than the prior loan’s principal.
Indiana
Indiana prohibits title loan lending. Short-term payday loans are allowed, with specific regulations including a maximum loan amount of $550 or 20% of the borrower’s gross income.
Iowa
Iowa prohibits car title loans. Short-term payday loans, up to $500, may be available, with terms limited to 31 days.
Kansas
In Kansas, installment loans are allowed, but lump-sum loans aren’t. Title loans are structured as open-ended credit because a licensed lender has no rate cap for this type of credit. While title loan lenders operate under the open-end credit code, no statute authorizing vehicle title lending exists.
Kentucky
Online title loans are allowed In Kentucky, and as of 2024, there are no limits on the repayment term or maximum loan amount. Short-term payday loans are offered, with a limit of 60 days and a maximum APR of 460%.
Louisiana
Louisiana has state restrictions on short-term loans. Lenders must make loans for more than $350, and the terms must be longer than two months. The legal maximum amount of interest that can be charged in Louisiana is 12%, with a few exceptions for mortgages and borrowing for business or commercial purposes.
Maine
Maine doesn’t allow title loan lenders to operate. Maine’s legal maximum interest rate is 6% unless otherwise agreed.
Maryland
Under Maryland law, a title loan is a consumer loan. That means lenders must follow consumer loan licensing requirements and interest rate legal caps. The maximum legal interest for consumer loans in Maryland is 33%.
Massachusetts
Title loans are considered illegal in Massachusetts. Under state law, no one can make loans of $6,000 or less if the amount payable for interest and expenses is more than 12% annually on the loaned amount without first getting a license from the commission of banks.
Michigan
Auto title loans aren’t permitted in Michigan if they involve the lender taking physical possession of the borrower’s title. There is a maximum interest rate of 5% in Michigan or 7% on written agreements.
Minnesota
Minnesota doesn’t allow title loans. According to the state, unlicensed title lenders aren’t complying with consumer protection laws, particularly limits on finance and interest charges. Minnesota statute defines general interest rates as 6% and 8% for written contracts.
Mississippi
The Title Pledge Act dictates what can and can’t happen in title loan lending. The maximum loan amount is $2,500, and the monthly cost limits are 25%. The term limits are 30 days, but this can be renewed for a 10% fee.
If a borrower doesn’t repay a car title loan in Mississippi and the car is sold, the borrower gets 85% of the surplus. Additionally, the loan can’t be paid off with another title loan.
Missouri
Missouri permits car title loans under the state’s Title Loans Law. The maximum loan amount is $5,000, and the term limits are not less than 30 days. Renewals can happen, but at the third renewal, 10% of the loan has to be paid down.
There are no caps on the costs of the loan. Restrictions in Missouri include that you can’t get a loan unless you have a clear title, and no waiver of rights is allowed.
If you’re a consumer who gets a title loan in Missouri, the lender can sell the vehicle if you don’t pay it as agreed. They can pursue the deficiency balance but must pay the surplus balance back.
Montana
A lender must be licensed by the state to provide title loans. There is a licensing fee, and each license must post a bond of $10,000 for each location. A title loan can have terms of 30 days, and then there can be renewals, but the borrower has to reduce their principal by at least 10% each time.
Interest rates are limited to 25% for each 30-day loan portion of not more than $2,000. For loans over $2,000 but not over $4,000, the interest rate is capped at 18% for each 30 days. There’s a 10% rate cap for loans over $4,000.
The title has to be clear in Montana, and the borrower can’t be threatened with a criminal process to collect on the loan.
Nebraska
Recently, a new law was signed into effect, amending the Nebraska Installment Law. Now, lenders providing $25,000 or less loans must be licensed. The legal limit for interest rates in Nebraska is 6% or 16% for contracts. If the state doesn’t license a lender, they cannot legally provide short-term loans.
Nevada
Title loans are permitted in Nevada, with the maximum amount up to the vehicle’s fair market value. There’s no cap on costs and interest rates, but additional fees can’t be. The term limits are 30 days, with up to six renewals for a maximum of 210 days if conditions are met.
Lenders can’t make criminal threats and must consider a borrower’s repayment ability before lending money. In Nevada, a borrower can provide the car’s title to the lender or add the lender as a lienholder to the title.
New Hampshire
New Hampshire permits car title laws under the Pawnbroker/Lender Act. The maximum loan amount is $10,000, with a 25% cap on the monthly interest plus a lien fee. One late fee per payment of up to 5% of the installment amount can be charged after ten days.
There are term limits of up to one month for the original term, and if at least 10% of the loan is paid down, there can be as many as ten renewals.
Prohibited practices by lenders include only being able to provide one loan secured by one title, and there is a right to cancel within one day. A lender can’t make a loan to someone who has another outstanding loan within 60 days.
New Jersey
Car title loans aren’t legal in New Jersey, and the interest rate cap for most types of consumer loans is 30%.
New Mexico
Under the New Mexico Small Loan Act, car title loans are permitted in the state with no cost cap but a $2,500 maximum loan amount. A late fee of 5% is allowed to be charged to the borrower after ten days, and the term limits require the loan to be paid back in a single installment.
New York
Payday lending and car title loans aren’t legal in New York. The state also caps interest rates and repayment terms for most unsecured loans. The maximum interest rate on a loan in New York is 16% per year.
North Carolina
Title loans aren’t legal in North Carolina, the first state to regulate small loans strictly. The annual interest rate cap is 36%.
North Dakota
North Dakota has interest rate laws. The consumer loan interest rate limit is 6%, which prevents title loan companies from operating here, and they are considered illegal.
Ohio
Title loans are technically illegal in Ohio. The Short-Term Loan Act prevents lenders from accepting a title as collateral for a short-term loan. Interest rates for short-term loans are also capped at 28%.
Oklahoma
A title loan lender has to be licensed by the state of Oklahoma to offer small loans. A licensee can only charge and collect an interest rate of not more than 17% per month. There are also limits on how much money a licensee can have outstanding per customer.
Oregon
A lender must be licensed in Oregon and can’t charge more than 36% annual interest. The origination fee can be up to 10% of the loan amount, with a maximum of $30. A loan can only be offered for 31 days and can be renewed more than twice. The loan must be for at least 31 days and can’t exceed 60 days. If the terms are more than 60 days, it becomes an installment loan.
Pennsylvania
Title loans are illegal in Pennsylvania because they violate the Loan Interest and Protection Law and other laws.
Rhode Island
Because it’s illegal to charge interest on a loan at more than 21% within the state, title loans are only sometimes an option in Rhode Island.
South Carolina
There are limits on short-term vehicle-secured loans in South Carolina. They can only be for an original period of one month, after which point the lender may allow the loan to be renewed for up to six periods. It can be up to 240 days.
Accrued interest can’t be added to the principal of a loan at the time of renewal. The lender has to verify the borrower’s ability to pay the funds back, and the loan can be, at most, the fair market value of the vehicle securing it.
Tennessee
The Tennessee Title Pledge Act permits car title loans up to $2,500. The loan term limit is 30 days when a borrower can automatically renew. On the third renewal, the borrower has to pay 5% of the original amount plus fees and interest. A clear title is required, with lenders not being allowed to provide funding on an encumbered title.
Tennessee title loans can only have a 2% monthly interest rate, and lenders can charge up to 1/5 of the loan’s original fees.
State law requires full ownership of your vehicle and proof of ownership, as well as showing your driver’s license and being 18 or older.
Texas
Texas allows car title loans with no cap on the maximum loan amount. As of 2024, there are no limits on fees or interest rates for most personal loans within the state. Single-payment and installment loans are allowed, although the loan can be at most 180 days.
Utah
In 2003, the state legislature in Utah passed House Bill 189, which amended the Financial Institutes Act. Under this, title lenders are regulated. The title lender has to register with the state and post the interest or fees charged in connection with a loan following the Truth in Lending requirements.
Only one loan can be provided up to the fair market value of a vehicle at a time. The loan may be renewed, and the interest rate or costs aren’t caps.
If the lender repossesses a car, the borrower gets the surplus, if there is any, from the sale proceeds. Utah law requires that a lender verify a borrower’s ability to repay the loan, and only one loan is allowed per vehicle. Rollovers without a request from the borrower are also prohibited.
Vermont
Title loans aren’t legal in Vermont because the interest rate may exceed the state’s allowed limit. Vermont also requires state lending licensing, which generally prevents title loans from being offered.
Virginia
Virginia state law allows title loans of up to 50% of the fair market value of a vehicle. The interest rate is capped at 22% per month for an outstanding balance of up to $700. For a balance of $701 to $1,400, the cap is 18%, and there’s a 15% interest rate cap for loans of $1,401 and higher. A 5% late fee payment is allowed once the loan is seven days past due.
The loan terms must be broken into equal monthly installments, with terms of at least 120 days and up to 12 months. Rollovers and renewals aren’t permitted.
The lender has to provide a 10-day notice of repossession, and if a vehicle is sold, surplus funds must be given to the borrower.
A borrower can’t have more than one lien or loan at a time, there can’t be prepayment penalties, and Virginia law prohibits providing these short-term loans to active-duty military members. The lender must receive the title, and the vehicle lien has to be filed with the DMV.
Washington
Some lenders, if they have the proper endorsement from the state, may make small loans of up to $700 at interest rates that otherwise exceed the caps in Washington State, but this is uncommon. Otherwise, there is a cap on interest rates of 12% per year and these interest rate caps effectively limit the ability of companies to offer title loans within the state.
West Virginia
Car title loans aren’t allowed in West Virginia. The state prohibits any short term loans payable with terms of less than a year.
Wisconsin
Wisconsin law allows borrowers to provide title loans for up to 50% of the vehicle’s value, with a $25,000 total maximum. There’s no cap on interest rates, and the loan term can be up to six months. Lenders are prohibited from requiring a vehicle key as security and must provide at least 20 days’ notice before repossessing a vehicle.
Wyoming
There are laws in Wyoming dictating that loans secured by a vehicle title with a term of no more than 12 months have to follow specific guidelines. One is that to offer title loans, the lender has to be licensed. There is a limit of $30 or 20% per month on finance charges for the loan’s principal balance. Another regulation is that title loans can’t be repaid, refinanced, or consolidated by the proceeds from another short-term vehicle title loan or similar arrangement.
How Car Title Loans Are Regulated
Title loan regulations happen at the state level, and there are three broad categories that the above states might fall into. In some states, title loans aren’t allowed under any circumstances. In other states, title loans are legally allowed but might have restrictions. In the third category, there may be loopholes where you can get a title loan but your lender may not be fully licensed or you may be limited to in how much you can borrow. This means the state bans title loans or has strict requirements, but a lender can structure these loans outside of the typical definition of a title loan.
If you’re in a state that outright bans title loans, you may have to find an alternative funding option. Call Premier Title Loans at 800-250-6279 to learn more about your state’s title loan lending options.
