Title Loan Laws and Regulations by state

Car Title Loan Regulation

Title Loans are a type of secured short-term cash advance backed by a vehicle title as collateral.

Depending on your state laws Title Loans can be legal, restricted, or prohibited. CFA also determines some states which operate and provide Title loans through legal loopholes though it’s not allowed.

State laws regulate loan amounts, terms and rates, consumer protection rights and repossession of the vehicle if a borrower can’t repay the loan on time.

States, where Car Title Loans are absolutely legal, are:

Moreover, Delaware, Idaho, Illinois, Missouri, Nevada, and Wisconsin set no cap on the cost of a car title loan.

States where you can get a loan secured by your car title, but it may come under the name of Installment Loan, or open-end credit, etc. Watch out for some limits or caps on Title Loan amounts, rates, and terms in the following states: 

As car title loans may be restricted in the above-mentioned states, you may consider other loan options such as Personal loans, Payday loans, etc.

Car Title Loans Chart

Max Title Loan amount determines how much maximum loan size you can get according to the state law. 

Title Loan Cost Limits may show the maximum loan cost per month, maximum APR, or whether there’re no caps on rates from the state. Some lenders can charge both interest and additional fees. 

NSF (Non Sufficient Funds) Fees are a type of penalty lenders can charge in case you don’r repay the title loan on time. 

Title Loan term limits determine the duration of the loan, including all the possible renewals or roll-overs as well as additional charges for these services. 

Title Loan Cost includes the loan amount plus annual percentage rate (APR) calculated for the terms of the loan  taking into account the maximum rate authorized in state law. 

Sale/Leaseback means that title lenders structure loans as if the borrower “sold” a vehicle to their company, then has to pay to “lease” the vehicle. 

Right to Cure notes state law consumer protection rights for a borrower. If your vehicle has been repossessed before the vehicle is sold to repay the loan, you can apply fot time limits to catch up on payments or any extended payment plan options. 

Surplus / or Deficiency is some extra funds from selling a repossessed vehicle after paying off the title loan, interest, and repossession fees. 

It also shows whether the lender is permitted or prohibited from suing borrowers for any amount still owed after the vehicle has been sold.

Car Title Loan Law Chart

First of all, any resident of the USA, either a lender or a borrower, needs to be aware and follow all the Federal Title Loan laws.
Secondly, every state has its own rules regulation this short-term financing.

And what makes Title Loans even more difficult and sometimes confusing, cities, and towns can develop their own regulations of car title loans within their jurisdictions.

In order to get informed on auto title financing laws always check the key points peculiar to your state before applying.

How are Car Title Loans regulated By State?

Though Title loans seem a convenient way to get quick cash, not all the states permit this cash advance. The authorities also determine how much you can get. 

Federal laws only require Title Loan lenders provide you with clear terms and costs of the loan in writing before you sign the contract. It’s stated in the Truth in Lending Act.

Legal status of Title Loans is determined by each state and recorded in the state’s statutes and acts. 

Car Title Loan Protections for the Military 

The Federal Law and Department of Defense rule provide special protections to the military concerning short-term Title Loans.

• They cap the APR to 36% on average. 
• No access to a check or bank account is allowed.
• Certain disclosures about the Title loan costs and other consumer rights must be given to the military.

The military that still find Car Title Loans very expensive, may consider other financial assistance from military aid societies such as the Army Emergency Relief, Navy and Marine Corps Relief Society, Air Force Aid Society, or Coast Guard Mutual Aid, etc.