What a title loan costs — before Minnesota’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 Minnesota
- Rate cap
- No dedicated title-loan rate. A title-secured consumer loan is made under the Regulated Loan Act (Minn. Stat. ch. 56) with rates set by Minn. Stat. 47.59, subd. 3: the greater of 21.75% APR or a tiered 33%/yr on the first $1,425 of principal and 19%/yr above. The 50% APR ceiling in Minn. Stat. 47.60 applies only to unsecured “consumer small loans” of $350 or less (payday-style), not to title loans.
- Key law
- No dedicated title-loan statute. Title-secured lending falls under the Regulated Loan Act (Minn. Stat. ch. 56, esp. 56.131) or Industrial Loan & Thrift (ch. 53), with permissible rates set by Minn. Stat. 47.59, subd. 3. Minn. Stat. 47.60 / 47.601 cover only small unsecured cash-advance loans.
- Enforcement
- The Minnesota Department of Commerce licenses and supervises lenders; a title lender must hold a Regulated Lender (ch. 56) or Industrial Loan & Thrift (ch. 53) license. Commerce warns that a title loan “tends to be a very expensive form of credit and you can lose your vehicle” and should be a last resort.
Minnesota has no dedicated car-title-loan statute; title-secured loans fall under the Regulated Loan Act (56.131), which pins rates to Minn. Stat. 47.59 — a maximum of about 33% APR on the first $1,425 of principal, far below high-cost title lending.
What it means for a Minnesota borrower
Loans secured by a vehicle title are legal in Minnesota, but only as rate-capped installment loans (about 21.75–33% APR under 47.59), because no statute authorizes the high-cost single-payment title-loan model. A Minnesota title borrower gets a capped installment loan, not the 200–300% APR product common in permissive states.
If you already have a title loan in Minnesota
A loan that violates Minnesota’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 Minnesota — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the Minnesota attorney general and the CFPB.
- Ask whether the balance is even collectable under Minnesota law before you pay a collector.
Cheaper first — try these before a title loan in Minnesota
Title Loans and tribal lenders in Minnesota
Many online lenders that market title loans to Minnesota 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 Minnesota residents and how state law applies to them, see the Minnesota tribal-lending page.
Tribal loans in Minnesota →Frequently asked questions
Are title loans legal in Minnesota?
In Minnesota, 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 Minnesota?
No dedicated title-loan rate. A title-secured consumer loan is made under the Regulated Loan Act (Minn. Stat. ch. 56) with rates set by Minn. Stat. 47.59, subd. 3: the greater of 21.75% APR or a tiered 33%/yr on the first $1,425 of principal and 19%/yr above. The 50% APR ceiling in Minn. Stat. 47.60 applies only to unsecured “consumer small loans” of $350 or less (payday-style), not to title loans.
What can I do about a title loan I already have in Minnesota?
Because Minnesota 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 Minnesota — many high-cost online lenders are not. This is general information, not legal advice.