What a title loan costs — before Michigan’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 Michigan
- Rate cap
- Michigan does not authorize car title loans as a separate product. Licensed lenders are capped at 25%/yr (Credit Reform Act, MCL 445.1851–445.1864); the general usury cap is 7%/yr (MCL 438.31) and charging over 25% is criminal usury (MCL 438.41).
- Key law
- Michigan Regulatory Loan Act (MCL 493.1 et seq.) and Credit Reform Act (MCL 445.1851–445.1864). No title-pledge statute exists.
- Enforcement
- The Department of Insurance and Financial Services (DIFS) licenses lenders and the Attorney General enforces. The AG has sued title-loan operators, including one making loans at an alleged ~231% APR, resulting in a default judgment.
Michigan’s Attorney General classifies ~300% APR auto title loans as illegal and obtained a default judgment against a title lender whose loans allegedly ran ~231% APR.
What it means for a Michigan borrower
There is no legal high-cost car title loan in Michigan. Any lender offering a title loan at triple-digit APR is operating outside the law, and the state Attorney General has taken such lenders to court.
If you already have a title loan in Michigan
A loan that violates Michigan’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 Michigan — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the Michigan attorney general and the CFPB.
- Ask whether the balance is even collectable under Michigan law before you pay a collector.
Cheaper first — try these before a title loan in Michigan
Title Loans and tribal lenders in Michigan
Many online lenders that market title loans to Michigan 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 Michigan residents and how state law applies to them, see the Michigan tribal-lending page.
Tribal loans in Michigan →Frequently asked questions
Are title loans legal in Michigan?
In Michigan, 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 Michigan?
Michigan does not authorize car title loans as a separate product. Licensed lenders are capped at 25%/yr (Credit Reform Act, MCL 445.1851–445.1864); the general usury cap is 7%/yr (MCL 438.31) and charging over 25% is criminal usury (MCL 438.41).
What can I do about a title loan I already have in Michigan?
Because Michigan 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 Michigan — many high-cost online lenders are not. This is general information, not legal advice.