Title Loan Laws by State

Since 01/31/2018, car title loans are legal in 23 states. In a few states, which include Kansas, Louisiana, and South Carolina, vehicle title lending works through legal loopholes.

It is important to check with your state for their latest and most up-to-date title loan law information because the laws can sometimes change.

To check your state’s legislative website, click the appropriate citation state link below:

AlabamaAla. Code §5-19A-1 et seq.
ArizonaAriz. Stat. 44-281 et seq.
DelawareDel. Code Tit. 5 §§ 2250 et seq.
FloridaFla. Stat. 537 et seq.(537.001-537.018)
GeorgiaGa. Code §§ 44-12-130et seq.
IdahoIdaho Code Ann. § 28-46-501 to -509
IllinoisIL Admin. Code Tit. 38, §§110.300-430
KansasKan. Stat. Chap. 16a Article 2
KentuckyKy. Rev. Stat. 286.9-010 et seq.
LouisianaRS 9:3578:1 et seq.
MississippiMiss. Code §§ 75-67-401 to -449
MissouriMo. Rev. Stat. §367.500-367.533
MinnesotaMinn. Stat. § 47.60 et seq
MontanaMont. Code 31-1-701 et seq.
NevadaNev. Rev. Stat. § 604A.105
New HampshireN.H. Rev. Stat.§ 399-A
New MexicoN.M. Stat. Ann. §§ 58-15-1 to -38
OregonOr. Rev. Stat. Ann. § 725A.101 et seq.
Rhode IslandR.I. Gen. Laws §19-14.1-1 et seq.
South Carolina34-39-110 et seq.
South DakotaS.D. Codified Laws Ann. §§ 54-4-70 to 72
TennesseeTN Title Pledge Act (§ 45-15-101 to § 45-15-120)
TexasTex Fin. Code tit.5 §§ 393.001-393.628
UtahUtah Code §§ 7-24-101 et seq.
VirginiaCode of Virginia Tit. 6.2 Chap. 22
WisconsinWis. Stat. § 138.16

About Car Title Loans

A title loan is just a fancy way to describe the act of borrowing money against the value of your car. Every vehicle has equity on which you can take out a loan.

A title loan differs from a bank loan because it’s more accessible to those who are suffering from poor credit, aren’t employed, or are facing bankruptcy.

Essentially, title loans allow borrowers to take out money by using the title of their vehicle as a form of collateral. You’ll still be able to use your vehicle and get access to cash that you need.

The particular requirements to receive a title loan vary between lenders and states. Normally, lenders will take into consideration things like the value of the vehicle and the income of the borrower.

Who Should Get a Title Loan?

Not everyone should take out a title loan. Learn more about what makes a title loan worthwhile for certain people.

Age is one of the most fundamental requirements for getting a title loan throughout the country.

You must be at least 18-years-old and be in possession of a vehicle title in your name that is lien-free. Some states have opted to ban title loans entirely.

Others allow title loans in a similar way as short-term lenders or pawnbrokers. Many states have passed specific laws that determine what title lenders can and can’t do.

Some of these regulations set specific limits for interest rates or loan amounts.

For example, New Mexico doesn’t allow people to borrow over $2,500.

In Nevada, income is the determining factor when it comes to borrowing limits. The monthly loan payment isn’t allowed to be more than a quarter of a borrower’s pre-tax income.

Each State Has Different Title Loan Laws

While some states lay out clear guidelines in regards to title loans, others don’t have any limits on how much can be borrowed.

Regardless, borrowers need to remain vigilant when signing anything. It’s important to understand your obligations since title loans are serious, short-term loans.

This means that borrowers will probably have to pay significant interest rates in a short amount of time. Some lenders and states might offer an extension.

However, others will maintain the right to take your vehicle even after the first payment is missed.

Laws for Repossession

If you’re borrowing in New Mexico, your vehicle ca get repossessed after a default. In Kansas, however, lenders must wait a minimum of 10 days following any missed payments before moving towards repossession.

Additionally, the first step must be to give the borrower another 20 days to make a payment. Some states even force lenders to offer borrowers a chance to pay their loan balance in order to prevent their vehicle from entering into the used-car market.

Keep in mind that you might still owe some money even after a lender has repossessed the vehicle.

While it depends on your state’s laws, you might be on the hook for the difference between the selling price of your vehicle and what you owe.

Some state laws determine whether any excess money from a sale is given to the lender or the borrower.

The laws surrounding title loans vary between each state. It’s important to become familiar with the obligations and rights surrounding your situation before registering for a loan.