What a title loan costs — before Texas’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 Texas
- Rate cap
- No effective cap. The third-party lender's interest is limited (typically at/below 10%), but the CAB fee for arranging and guaranteeing the loan is not capped by state law, producing typical APRs of roughly 200%-300%.
- Key law
- Texas Finance Code ch. 393 (Credit Services Organizations / Credit Access Businesses), subch. G; underlying loans under ch. 342. Administered by the Office of Consumer Credit Commissioner.
- Enforcement
- All Credit Access Businesses must be licensed by the Texas Office of Consumer Credit Commissioner (OCCC). Some Texas cities (e.g., Dallas, Austin, Houston) have enacted local ordinances further restricting CAB loan sizes and rollovers.
Texas title lenders operate as Credit Access Businesses under Finance Code ch. 393; CAB fees are not capped, yielding typical APRs around 200%-300%.
What it means for a Texas borrower
Auto title loans are legal in Texas but are sold through a broker (CAB) arrangement that sidesteps the usury cap. The interest on the loan itself is low, but the separate CAB fee is uncapped, so real annual costs commonly run 200%-300%. Local city ordinances may add borrower protections where you live.
Before you borrow in Texas
- Check whether the lender is licensed in Texas — many high-cost online lenders are not.
- Revoke ACH authorization in writing to stop automatic withdrawals from your account.
- File a complaint with the Texas attorney general and the CFPB.
- Ask whether the balance is even collectable under Texas law before you pay a collector.
Cheaper first — try these before a title loan in Texas
Title Loans and tribal lenders in Texas
Many online lenders that market title loans to Texas 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 Texas residents and how state law applies to them, see the Texas tribal-lending page.
Tribal loans in Texas →Frequently asked questions
Are title loans legal in Texas?
In Texas, single-payment auto title loans are legal and enforceable, commonly around 300% APR, with the car as collateral. The speed is real; so is the repossession risk. Check the total cost and never pledge the car you rely on to get to work.
What is the maximum title loan rate in Texas?
No effective cap. The third-party lender's interest is limited (typically at/below 10%), but the CAB fee for arranging and guaranteeing the loan is not capped by state law, producing typical APRs of roughly 200%-300%.
What can I do about a title loan I already have in Texas?
Texas allows this lending, so the loan is generally enforceable — but you can still revoke ACH authorization in writing, avoid taking a second loan to cover the first, and file a complaint with the Texas attorney general or the CFPB if the lender breaks the rules.