What a title loan costs — before California’s rules
A title loan is usually a single-payment loan due in 15–30 days at around 25% per month — roughly 300% APR — secured by your vehicle. The defining risk is not the rate but the collateral: miss a payment and the lender can repossess the car, and research finds about one in five borrowers eventually loses the vehicle. Where a state caps rates low, single-payment title lending is not offered and a loan above the cap is generally void.
The law in California
- Rate cap
- 36% plus the federal funds rate on principal of $2,500 to under $10,000, with a 12-month minimum term (Cal. Fin. Code, added by AB 539, eff. Jan 1, 2020). No rate cap on loans of $10,000 or more.
- Key law
- California Financing Law (CFL), Cal. Fin. Code Div. 9; amended by AB 539 (2019), the Fair Access to Credit Act.
- Enforcement
- Enforced by the California Department of Financial Protection and Innovation (DFPI), which licenses CFL lenders and examines title lenders such as TitleMax/LoanMart for compliance.
Since Jan 1, 2020, AB 539 caps title/consumer loans of $2,500–$9,999 at 36% + the federal funds rate; the cap does not apply at $10,000 and above.
What it means for a California borrower
AB 539 ended the old small-dollar triple-digit title loan in California: loans from $2,500 up to $10,000 are now capped near 36%. But because California sets no rate ceiling at $10,000 and above, some lenders push title loans just over that line where APRs can still run into the triple digits. Borrow above $10,000 and you lose the rate protection.
If you already have a title loan in California
A loan that violates California’s rate limits may be partly or fully unenforceable — which changes your options with the lender and any collector. This is general information, not legal advice.
- Check whether the lender is licensed in California — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the California attorney general and the CFPB.
- Ask whether the balance is even collectable under California law before you pay a collector.
Cheaper first — try these before a title loan in California
Title Loans and tribal lenders in California
Many online lenders that market title loans to California residents are tribal lenders arguing their sovereignty places them outside state rate caps — a separate legal question this site tracks in depth. For which tribal brands lend to California residents and how state law applies to them, see the California tribal-lending page.
Tribal loans in California →Frequently asked questions
Are title loans legal in California?
In California, title loans are allowed only under limits — a rate cap, an installment structure, or consumer-finance licensing — so a legal title loan costs less and looks different from the ~300% single-payment norm, and any lender exceeding those limits is out of compliance.
What is the maximum title loan rate in California?
36% plus the federal funds rate on principal of $2,500 to under $10,000, with a 12-month minimum term (Cal. Fin. Code, added by AB 539, eff. Jan 1, 2020). No rate cap on loans of $10,000 or more.
What can I do about a title loan I already have in California?
Because California restricts high-cost title loans, a loan that exceeds the state limit may be partly or fully uncollectible. Check whether the lender is licensed in California — many high-cost online lenders are not. This is general information, not legal advice.