What a title loan costs — before Iowa’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 Iowa
- Rate cap
- 21% per year maximum finance charge on a consumer loan secured by a motor-vehicle certificate of title (Iowa Code 537.2403), unless made under licensed-lender chapters 536/536A.
- Key law
- Iowa Consumer Credit Code, Iowa Code Chapter 537, specifically 537.2403.
- Enforcement
- Administered by the Iowa Attorney General’s Consumer Protection Division; the statute makes an evasive structure an unlawful practice under Iowa Code 714.16.
Iowa Code 537.2403 caps motor-vehicle-title-secured consumer loans at 21% per year and voids attempts to evade it via pawn, sale, or lease structuring.
What it means for a Iowa borrower
In Iowa a lender cannot charge more than 21% a year on a loan secured by your car title, so the triple-digit-APR title loans advertised in other states are not legally available. Lenders also cannot dodge the cap by calling it a pawn, sale-and-leaseback, or rental. If you were overcharged, the loan is challengeable.
If you already have a title loan in Iowa
A loan that violates Iowa’s ban 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 Iowa — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the Iowa attorney general and the CFPB.
- Ask whether the balance is even collectable under Iowa law before you pay a collector.
Cheaper first — try these before a title loan in Iowa
Title Loans and tribal lenders in Iowa
Many online lenders that market title loans to Iowa 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 Iowa residents and how state law applies to them, see the Iowa tribal-lending page.
Tribal loans in Iowa →Frequently asked questions
Are title loans legal in Iowa?
In Iowa, a high-cost single-payment title loan is not legally viable. The state’s rate cap or an outright ban makes a ~300% APR title loan void or unavailable, so licensed title lenders do not operate — and a lender that lends anyway is on weak legal footing.
What is the maximum title loan rate in Iowa?
21% per year maximum finance charge on a consumer loan secured by a motor-vehicle certificate of title (Iowa Code 537.2403), unless made under licensed-lender chapters 536/536A.
What can I do about a title loan I already have in Iowa?
Because Iowa effectively bans high-cost title loans, a loan that exceeds the state limit may be partly or fully uncollectible. Check whether the lender is licensed in Iowa — many high-cost online lenders are not. This is general information, not legal advice.