What a title loan costs — before New Mexico’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 New Mexico
- Rate cap
- 36% APR maximum on loans of $10,000 or less (adjustable upward only if prime exceeds 10% for three consecutive months); prior maximum was 175% APR.
- Key law
- New Mexico HB 132 (2022), amending the New Mexico Small Loan Act and Bank Installment Loan Act; effective Jan. 1, 2023.
- Enforcement
- Enforced by the New Mexico Financial Institutions Division. The law added strong anti-evasion provisions modeled on Illinois and Maine to stop rate-cap circumvention.
Effective January 1, 2023, New Mexico capped APR at 36% on loans of $10,000 or less, down from a prior 175% maximum (HB 132).
What it means for a New Mexico borrower
As of 2023 New Mexico caps small-loan interest, including title loans, at 36% APR. High-cost single-payment title loans are no longer viable, so any lender charging triple-digit rates on a New Mexico title loan is violating state law.
If you already have a title loan in New Mexico
A loan that violates New Mexico’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 New Mexico — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the New Mexico attorney general and the CFPB.
- Ask whether the balance is even collectable under New Mexico law before you pay a collector.
Cheaper first — try these before a title loan in New Mexico
Title Loans and tribal lenders in New Mexico
Many online lenders that market title loans to New Mexico 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 New Mexico residents and how state law applies to them, see the New Mexico tribal-lending page.
Tribal loans in New Mexico →Frequently asked questions
Are title loans legal in New Mexico?
In New Mexico, 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 New Mexico?
36% APR maximum on loans of $10,000 or less (adjustable upward only if prime exceeds 10% for three consecutive months); prior maximum was 175% APR.
What can I do about a title loan I already have in New Mexico?
Because New Mexico 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 New Mexico — many high-cost online lenders are not. This is general information, not legal advice.