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Title Loan Laws and Regulations

Title Loan Laws

Title loans, also known as car title loans or auto title loans, are thought to have originated in the early 1990s. They began as an adaptation of the pawnbroking model that has been in existence for centuries, where personal property is used as collateral for a short-term loan. The idea was to allow borrowers to use their vehicle title as security while retaining physical possession of the car, unlike traditional pawn loans where the pawnbroker holds onto the collateral.

How Title Loan Laws Evolve Over Time

Title loans often come with a tapestry of colorful regulations that reflect a state’s stance on consumer protection and lending practices. For example, in some states, such as Illinois, title loans are capped at $4,000, regardless of the value of the car, to protect consumers from borrowing more than they can afford to repay. On the other hand, in states like Mississippi, title loans can charge interest rates that reach into triple digits, often leading to a cycle of debt. Meanwhile, in Montana, title loans are completely banned, showcasing a direct legislative approach to consumer protection. These disparate approaches provide a fascinating glimpse into how differently states can perceive and regulate the same financial product.

Title Loan Laws Chart Broken Down By State

Here is a table of each state’s title loan laws illustrating whether they are legal, the maximum you can borrow and costs and term limits.

State	Are Title Loans Allowed?	Maximum You Can Borrow	Costs and Term Limits	Relevant Statutes
Alabama	Yes	No specified maximum	Costs: Up to 300% APR Term Limits: Typically 10-30 days, but can vary based on the lender	Alabama Pawnshop Act – Title 5, Chapter 19A
Alaska	Yes	No specified maximum	Costs: Not specifically defined, but lenders must adhere to state usury laws Term Limits: Varies by agreement, no state-mandated limits	Alaska Statutes Title 06 – Chapter 50
Arizona	Yes	No specified maximum	Costs: No specified rate cap for title loans Term Limits: Varies by agreement, no state-mandated limits	Arizona Revised Statutes Title 44 – Chapter 2.1
Arkansas	No	N/A	N/A	Arkansas Constitution Article 19, § 13
California	Yes	No specified maximum	Costs: – Up to $2,500: No rate cap – $2,500.01 to $4,999.99: 35% annual interest – $5,000 or more: No rate cap Term Limits: Varies by agreement, no state-mandated minimum or maximum.	California Financing Law – Division 9 of the California Financial Code
Colorado	Yes	No specified maximum	Costs: Up to 36% APR Term Limits: Minimum of six months	Colorado Revised Statutes Title 5 – Article 3.1
Connecticut	No	N/A	N/A	Connecticut General Statutes Title 36a – The Banking Law of Connecticut
Delaware	Yes	$1,000	Costs: No specific rate cap, but lenders must provide written agreements detailing interest rates and finance charges Term Limits: Up to 180 days	Delaware Code Title 5, Chapter 22
Florida	Yes	No specified maximum	Costs: Maximum interest rate of 30% on the first $2,000, 24% on amounts between $2,000 and $3,000, and 18% on amounts above $3,000 Term Limits: Minimum of 30 days, no maximum limit specified	Florida Statutes Chapter 537 – Title Loans
Georgia	Yes	$3,000	Costs: Up to 25% monthly interest rate for the first three months, and 12.5% for the fourth month Term Limits: Maximum of 30 days, can be renewed up to three times	Georgia Code Title 44, Chapter 12, Article 6
Hawaii	No	N/A	N/A	Hawaii Revised Statutes Chapter 480F
Idaho	Yes	No specified maximum	Costs: No specific rate cap, but lenders must adhere to state usury laws and cannot charge more than a 36% annual interest rate Term Limits: No state-mandated limits, varies by agreement	Idaho Code Title 28, Chapter 46 – Title Loan Act
Illinois	Yes	$4,000 or 50% of the borrower’s monthly income, whichever is less	Costs: Annual Percentage Rate (APR) cannot exceed 36% Term Limits: Minimum of 121 days	Illinois Compiled Statutes – Consumer Installment Loan Act (205 ILCS 670)
Indiana	No	N/A	N/A	Indiana Code Title 24 – Trade Regulation; Consumer Sales and Credit
Iowa	No	N/A	N/A	Iowa Code Title XIII – Commerce, Chapter 537 – Consumer Credit Code
Kansas	Yes	No specified maximum	Costs: No specific rate cap for title loans, but the state usury laws limit interest rates to 15% per annum for regulated lenders Term Limits: Varies by agreement, no state-mandated limits	Kansas Statutes Chapter 16a – Uniform Consumer Credit Code
Kentucky	No	N/A	N/A	Kentucky Revised Statutes Chapter 286.9 – Consumer Loan Companies
Louisiana	Yes	No specified maximum, but the loan amount cannot exceed the borrower’s unencumbered title value	Costs: Lenders can charge a maximum of 36% annual interest rate plus certain permitted fees Term Limits: 2 months minimum, no maximum limit specified	Louisiana Revised Statutes Title 9, Chapter 3, Subchapter D – Pawnbrokers and Title Loan Companies
Maine	No	N/A	N/A	Maine Revised Statutes Title 9-A: Maine Consumer Credit Code, Chapter 4: Interest
Maryland	No	N/A	N/A	Maryland Commercial Law Code Annotated § 12-306
Massachusetts	No	N/A	N/A	Massachusetts General Laws Chapter 140, Section 96
Michigan	No	N/A	N/A	Michigan Compiled Laws §§ 493.1 through 493.24 – Regulatory Loan Act
Minnesota	Yes	No specified maximum	Costs: Lenders can charge up to 2.75% monthly interest Term Limits: Varies by agreement, but most title loans in the state have a term of 30 days	Minnesota Statutes Chapter 47 – Loan Companies
Mississippi	Yes	$2,500	Costs: Lenders can charge up to 25% monthly interest rate Term Limits: Up to 30 days, can be renewed for a maximum of 10 times	Mississippi Code Title 75, Chapter 67, Article 13 – Title Pledge Act
Missouri	Yes	$5,000	Costs: Lenders can charge interest and fees not to exceed 75% of the initial loan amount for the entire loan term and all renewals Term Limits: Minimum of 30 days	Missouri Revised Statutes Chapter 367 – Pawnbrokers and Small Loans
Montana	Yes, but with significant restrictions	$300	Costs: Maximum Annual Percentage Rate (APR) of 36% on all consumer loans, including title loans Term Limits: Not specified, but subject to the general loan regulations of the state	Montana Code Annotated Title 32 – Financial Institutions, Chapter 5 – Consumer Loan Act
Nebraska	Yes	$500	Costs: Maximum Annual Percentage Rate (APR) of 24% on the loan amount Term Limits: Maximum of 34 days	Nebraska Revised Statutes Chapter 45 – Debtors and Creditors, Article 9 – Delayed Deposit Services
Nevada	Yes	Up to the fair market value of the vehicle	Costs: No cap on interest rates, but rates must be clearly stated in the loan agreement and cannot be unconscionable Term Limits: Minimum of 30 days, no maximum specified. The loan can be extended for 60 days beyond the initial loan period	Nevada Revised Statutes Chapter 604A – Deferred Deposit of Checks, High-Interest Loans, Title Loans, and Check-Cashing Services
New Hampshire	Yes	$10,000	Costs: Maximum Annual Percentage Rate (APR) of 25% Term Limits: Minimum of one month	New Hampshire Revised Statutes Chapter 399-A: Title Loans
New Jersey	No	N/A	N/A	New Jersey Statutes Title 17, Chapter 15A – Usury Savings Clause
New Mexico	Yes	No specified maximum	Costs: Maximum Annual Percentage Rate (APR) of 175% Term Limits: Minimum of 120 days and a maximum of 48 months	New Mexico Statutes Chapter 58 – Financial Institutions and Regulations, Article 15 – Small Loan Business
New York	No	N/A	N/A	New York Consolidated Laws, Banking Law – BNK § 14-a. Prohibited charges
North Carolina	No	N/A	N/A	North Carolina General Statutes Chapter 53, Article 15
North Dakota	No	N/A	N/A	No specific statute; title loans are not authorized under North Dakota Century Code
Ohio	No	N/A	N/A	Ohio Revised Code Title XIII – COMMERCIAL TRANSACTIONS – OHIO UNIFORM COMMERCIAL CODE
Oklahoma	Yes	Not specified	Costs: Rates vary, generally around 300% APR or more. Term Limits: Loans can be rolled over after 30 days.	Oklahoma Statutes Title 59. Pawnbrokers § 1501-1510 and Oklahoma Deferred Deposit Lending Act
Oregon	Yes	$50,000	Costs: Interest rates capped at 36% APR. Term Limits: Loan terms cannot exceed 60 days.	Oregon Consumer Finance Act, Oregon Title and Payday Loans Law
Pennsylvania	No	N/A	N/A	Pennsylvania Loan Interest and Protection Law, Motor Vehicle Sales Finance Act
Rhode Island	Yes	No statutory maximum	Costs: Interest rates can be high but must not be unconscionable. Term Limits: Loan terms are typically for 30 days but can be extended.	Rhode Island Title Loan Act
South Carolina	Yes	$2,500	Costs: up to 36% APR on first $600, up to 24% APR on next $1,400. Term Limits: Minimum term of 120 days; maximum term of 1 year.	South Carolina Consumer Protection Code – Title Loans
South Dakota	Yes	No specified maximum	Costs: 36% APR cap on all loans. Term Limits: Loans typically short-term but can be structured to avoid APR limit under certain conditions.	South Dakota Codified Laws 54-4-72
Tennessee	Yes	No specified maximum	Costs: Interest rates and fees subject to limitations. Term Limits: Maximum term of 30 days, renewable.	Tennessee Title Pledge Act
Texas	Yes	Not specifically capped; based on vehicle value	Costs: There is no cap on interest rates, but they are typically high. Term Limits: Loans can be up to 180 days in length.	Texas Finance Code, Title 5, Chapter 393
Utah	Yes	No specified maximum	Costs: No cap on interest rates, terms and fees must be disclosed. Term Limits: N/A	Utah Code Title 7, Chapter 24
Vermont	No	N/A	N/A	N/A
Virginia	Yes	50% of the value of the vehicle	Costs: Interest rates are capped at 22% per month on the first $700, 18% on the amount above $700 up to $1400, and 15% on any amount above $1400. Term Limits: Loan terms cannot exceed 12 months.	Virginia Code Title 6.2, Chapter 22
Washington	No	N/A	N/A	N/A
West Virginia	No	N/A	N/A	N/A
Wisconsin	Yes	No specified maximum	Costs: No cap on interest rates Term Limits: loan term must be less than or equal to 6 months.	Wisconsin Stat. § 138.16
Wyoming	Yes	No specified maximum	Costs: Finance charges can be as much as 20% per month on the principal amount. Term Limits: N/A	Wyo. Stat. § 40-14-362

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