Texas Title Loan Laws and Regulations

Table of Contents:

What do Texas Title Loan Laws Regulate?

Why are Title Loans so important for Texas borrowers?

Texas Laws aim at Title Loan consumer protection

Title Loan repossession Laws in Texas

How You’re Protected from Repossession in Texas

Title Loans Lenders regulation in Texas

What are the main Title Loan Rules in Texas?

How the law regulates Title Loan Interest rates and Fees in Texas

What are Title Loan Terms based on Texas laws?

What are Title Loan Requirements in Texas?

What You Need to Know about Title Loans in Texas

What do Texas Title Loan Laws Regulate?

Everybody can’t but admit that short-term Car Title Loans are a great way to get quick cash, especially if you have bad credit.

You only need a valid driver’s license and a vehicle that’s titled in your name to get a guaranteed lender’s approval. However, every borrower must consider loan interest rates and terms, as well as any Texas laws and regulations that may apply to Title Loans.

Why are Title Loans so important for Texas borrowers?

Federal laws don’t actually regulate title loans, it’s the responsibility of each state. At the federal level, the Consumer Bureau for Financial Protection is in charge of making sure that lenders offer Title Loans only to borrowers who can repay the money. It’s done to protect borrowers from predatory lending.

Texas Title Loan regulations determine:

• what the lender can do in case of a defaulted payment;
• limit interest rates that may be charged;
• if renewals and rollovers are allowed;
• limits on maximum and / or minimum Title loan amount;
• maximum and/or minimum terms of Title Loan repayment;
• any penalty fees, etc.

Title loans are Legal in Texas. The laws setm minimum and maximum 180 day(s) loan terms, but there is no limit on the amount that a consumer may borrow. So, Title Loan terms in Texas are up to 180 days. The interest rate is capped to up to 180 days which is 25%/mon. Lenders can charge . These regulations are all established by Tex Fin. Code tit.5 §§ 393.001-393.628; Tex. Admin. Code tit. 7 §§ 83.1001-83.6008; /Ch. 302, Texas Finance Code; Title 1 Texas Business and Commerce Code, https://www.consumerfed.org/pdfs/Resources.CTL.StateLawTermChart12.2.12.pdf.

Study these regulations carefully before applying for a Title Loan in Texas. Pay special attention to repossession laws. They state the lender’s behavior and consumer’s rights in case of loan default. It will be good to know in advance whether the lender is legally allowed to repossess the vehicle and sell it in order to cover the financial loss if a borrower doesn’t repay the loan on time.

Texas Laws aim at Title Loan consumer protection

As Title Loans are designed for covering short-term urgent financial needs, they should be considered only as solutions for emergency expenses. No credit check requirements for title loans make them more available than traditional bank loans but, on the other hand, riskier. That’s why the Texas state has established title loan laws and regulations whose main idea is to protect consumers. Make sure you understand all the details before choosing a Car Title Loan for quick funding in Texas.

Title Loan Repossession Laws in Texas

Repossession laws are probably the most important part that consumers must clarify before applying for a title loan. In Texas, the car title is used as collateral to secure a title loan.

According to Texas title loan regulations, a consumer can lose the vehicle if he or she falls behind on title loan payments or violates the terms of the title loan in some other way. The lender has the right to repossess the vehicle, sell it, and use the money of the sale as compensation for a defaulted loan.

It’s necessary to mention, that in some states, title lenders are not allowed to keep the surplus from the sale of a repossessed vehicle. In some states there exists the consumer right to cure period. It’s about a month on average. It means a borrower has this additional time to repay a defaulted loan in order to get back the vehicle.

If a customer doesn’t pay the money back even after this period, the vehicle will be repossessed.

How You’re Protected from Repossession in Texas

• First of all, Texas protects its residents by setting certain repossession laws.
• Secondly, the Government takes care that lenders offered additional repayment time, or plan to redeem the title by paying the loan back.
• The state also determines whether the vehicle can be sold and how much percent of the sale proceeds a lender can take.
• Title lenders are obliged to maintain detailed records regarding all title loan transactions.
• Texas title loan lenders violating these laws may be fined up to $1,000.

Title Loans Lenders regulation in Texas

Make sure the lender you apply to is licensed to provide Title Loans in Texas. They are to pay a certain fee annually for licensing. If you know that you borrow from a legitimate lending company, you may stay assured that your rights will be protected.

What are the main Title Loan Rules in Texas?

Title loans in Texas are regulated by Tex Fin. Code tit.5 §§ 393.001-393.628; Tex. Admin. Code tit. 7 §§ 83.1001-83.6008; /Ch. 302, Texas Finance Code; Title 1 Texas Business and Commerce Code. The official body that controls the lenders of Texas and protects consumers’ rights is Texas Office of Consumer Credit Commissioner (OCCC). In case of any question, or complaint you can always address. Find all the contact information on their website - https://www.occc.texas.gov/.

How the law regulates Title Loan Interest rates and Fees in Texas

Under Texas title loan laws, lenders are allowed to charge 120.00% APR. The maximum 180 day(s) Title loan term for Texas is also set by the state’s law. If the loan is not paid in full within up to 180 days repayment terms, the borrower takes a risk of having his or her vehicle repossessed.

What are Title Loan Terms based on Texas laws?

Under Texas Title Loan laws and Tex Fin. Code tit.5 §§ 393.001-393.628; Tex. Admin. Code tit. 7 §§ 83.1001-83.6008; /Ch. 302, Texas Finance Code; Title 1 Texas Business and Commerce Code, there are up to 180 days terms. The maximum loan amount allowed to borrow against a car title in Texas is also limited and usually depends on the following factors:

• Gross monthly income
• Value of the vehicle
• Requested loan amount
• Term of the loan

What are Title Loan Requirements in Texas?

Though Title Loanlaws differ by state, most lenders have similar requirements:

• A car title, or sometimes physical possession of the vehicle title.
• Proof of income from any source – alimony, child support, Social Security, workers’ compensation, or disability.

Besides, an applicant will be asked to provide the following information:

• An accurate description of the vehicle (make, model, year, mileage, etc.)
• Type of ID and ID number presented by you
• Amount of the loan
• The agreed-upon repayment date of the loan and the amount due
• The monthly rate and charges
• Your full legal name, address, contact number, and date of birth

Title Loan requirements for Texas residents are:

• A car title clear of any liens.
• A steady source of recurring income payments.
• Texas residence.
• You must be at least 18 years old.
• A valid government-issued photo ID. 

In a nutshell: What You Need to Know About Title Loans in Texas

• Texas Title Loan laws require lenders to be licensed, which means the state protects consumers against fraud. Good for you, as in any case when something goes wrong you can take legal action to stay safe.
• Title loans in Texas are regulated by Tex Fin. Code tit.5 §§ 393.001-393.628; Tex. Admin. Code tit. 7 §§ 83.1001-83.6008; /Ch. 302, Texas Finance Code; Title 1 Texas Business and Commerce Code.
• Any false advertising and selling or charging for any kind of insurance are considered predatory actions and lenders may be fined for them by law.
• All these and more – limits on Texas Title loan amounts, rates, terms, etc. are stated in the laws which you’d better study carefully before taking out a Title Loan.

File a complaint on Title Loan lender in Texas

If you need to file a complaint about your title loan service, or lender, you may contact Texas Office of Consumer Credit Commissioner (OCCC) online at https://www.occc.texas.gov/ or by phone.