Title Loans: How They Work, Costs and State Laws

By Lenditup Editorial Team · Last reviewed October 11, 2026 · How we verify

A title loan lets you borrow against a car you own. You keep driving it, but the car is the lender's security: miss the payments and it can be taken. What the loan may cost, how long it can last and the rules on repossession depend on your state.

How a title loan works

A title loan turns the value of a car you own into cash. The car stays with you; the title is what secures the loan. The steps are usually these:

You apply with details about yourself, your income and the car: make, model, year and mileage.
The lender values the car. Some lenders inspect it in person, others use photos and the vehicle details.
The lender makes an offer, usually a share of the car's value, and shows the APR, the payments and the total cost.
You sign and hand over the title, or the lender records a lien on it. Some lenders also fit a GPS tracker, where state law allows it.
You repay, either in one payment at the end of a short term or in installments, depending on the state and the lender.
You get the title back once the loan is paid in full.

The full walk-through, with a worked APR example, is in how title loans work.

What a title loan costs

Title loans cost more than most bank or credit union loans because many borrowers who use them have limited credit options. What a lender may charge depends entirely on the state.

For example, under Florida's title loan law, borrowing $1,000 for 30 days costs $25 in interest, so you repay $1,025. That is a 30% APR. Other states allow far more, and a few set no rate cap at all.

Always compare offers by APR and by the total you will repay, not by the monthly payment. Federal law (the Truth in Lending Act and Regulation Z) requires the lender to show both in writing before you sign.

In 15 of the 44 states and DC we cover there is no law written for title loans. There, a car-secured loan is treated like any other licensed consumer loan, so ordinary consumer-loan rate caps apply and fewer lenders offer it.

What lenders usually ask for

A car title in your name. Many lenders want it free of other loans; some accept a car you are still paying off.
A government-issued photo ID showing you are old enough to borrow (18 in most states, older in a few).
Proof of income, such as pay stubs, benefit statements or bank statements.
The car itself, or photos of it, so the lender can confirm its condition and value.

Requirements differ by lender and by state, and meeting them does not guarantee an offer. See the full list in title loan requirements.

The risks to weigh

You can lose the car. If you default, the lender can repossess it in most states.
Renewals add up. Rolling a short loan over into a new one adds another round of interest or fees each time.
You may still owe money after a repossession in states that let the lender collect what the sale didn't cover.

Alternatives to compare first

A personal installment loan spreads the cost over fixed monthly payments and doesn't put your car at risk. How installment loans work.
A payday alternative loan (PAL) from a federal credit union. NCUA rules cap their interest rate at 28%, plus an application fee of no more than $20.
A payment plan with the company you owe. Many utilities, hospitals and landlords offer one if you ask early.

Title loan laws by state

Each state page answers whether title loans are legal there and lists the rate cap, loan term, repossession rules and the statute, checked against the law itself. To compare states side by side, use the state title loan law table.

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One request lets lenders and lending marketplaces in our network see whether they can make you an offer. It's free, and you are under no obligation to accept.

Start a title loan request

Lenditup is not a lender. Sending a request does not mean you will be approved; each lender sets its own rates and terms.

Title loan questions

01Can I keep driving my car during a title loan?

Usually, yes. The lender holds the title, or records a lien on it, while you keep and drive the car. You get the title back once the loan is paid off.

02Do I need good credit for a title loan?

The car secures the loan, so many title lenders put more weight on the car and your income than on your credit score. Each lender sets its own rules, and some do check credit.

03How much can I borrow with a title loan?

Lenders usually offer a share of what the car is worth, and some states cap the loan amount. Your state page shows the cap where one exists.

04What happens to my car if I miss payments?

The lender can repossess it in most states, sometimes after a notice period that lets you catch up first. Some states also stop the lender from collecting any balance left after the car is sold. Your state page lists both rules.

05Is a title loan the same as a pawn loan?

Not quite. With a pawn you hand over the item. With a title loan you hand over, or put a lien on, the title and keep the car. A few states regulate title loans under their pawn laws, which the state pages note.

06Is Lenditup a title lender?

No. Lenditup is not a lender. We connect you with lenders in our network; the lender decides whether to approve you and sets the rate and terms.

Title loans: how they work