CAR TITLE LOAN
REGULATIONS IN TEXAS

Companies that offer car title loans and other short term loans in Texas must comply with state licensing and consumer protection laws. Title loan companies in Texas operate as Credit Access Businesses (CABs), which are regulated by the Texas Office of Consumer Credit Commissioner (OCCC). These businesses often arrange or broker loans and must comply with specific state laws and regulations.

Because of this unique structure as Credit Access Businesses, title loan regulations in Texas differ from those for traditional unsecured bank loans. Regulations can be inconsistent, misinterpreted, and sometimes overlap between state agencies, which is why borrowers should understand how Texas title loan laws actually function before agreeing to any set lending terms and signing a contract.

In addition to state regulations, some Texas cities have enacted local ordinances that impose additional limits and underwriting requirements on title loans. For example, Houston has citywide ordinances that limit loan amounts and monthly payments for title loans. Licensed lenders in the city must also register each year with the city as a Credit Access Business, and there are additional restrictions on loan renewals and contract language.

Lending Laws For Texas Title Loan Companies

Before signing off on a title loan, it is recommended to evaluate the different lending terms and repayment amounts from multiple lenders. This includes a full review of the fees, interest, and expenses added to your loan. Licensed lenders in Texas must also break down the finance costs and other possible charges and explain your rights as a consumer in plain language. They must also explain your consumer rights in simple language. For example, you have time to get your vehicle back after it's repossessed. Borrowers must be provided with documentation explaining what happens after repossession, the auction process for your vehicle, and how surplus proceeds (if any) are distributed after the vehicle is sold.

When you take out a new title loan or renew an existing one, your lender must detail the terms in your contract and specify the fees if you default on the monthly payments. After signing, your lender must provide you with a copy of the agreement and specify the process and timeline for getting your car's title back after the loan is paid off.

APR And Interest Rate Restrictions on Title Loans in Texas

Every contract must include the complete repayment terms, including the total number of payments, the total amount of interest, and the total amount paid over the life of the loan. Texas does not set an interest rate cap on title loans in Texas, but lenders must disclose the Annual Percentage Rate (APR) and all other finance charges associated with your loan.

If you pay off your title loan early, Texas law generally does not allow lenders to charge a payment penalty. In the past, some lenders have threatened to bring criminal charges against customers who miss a payment. They would do this if a customer missed a payment or defaulted on a payment. In such cases, the lender can repossess your vehicle since the loan is outstanding and the payment method was faulty. As you probably know, they can't arrest you or send the local sheriff to your door. Any company that threatens criminal acts should be avoided at all costs, as such actions violate state laws.

If your payment is returned due to insufficient funds or a bank error, you can still prevent repossession by contacting your lender. This includes the following:

1. Contact your lender to let them know there's been an error in your bank account, and the payment won't go through.
2. Following up in writing, such as email or mail, with the same information.
3. Send a “return receipt requested” letter to the lender indicated on your contract. The lender may or may not be the local office where you got the loan. 

Once you have taken those three steps, a lender should allow reasonable arrangements to bring the loan current, depending on the terms of your contract.

Choose A Title Loan Company in Texas That Follows Local Regulations

Licensed title loan companies in Texas must post a copy of their current OCCC license at all physical locations, whether they offer storefront financing or online title loans. Online lenders in Texas must prominently display their state licensing information on their websites.

Ensure your lender's license is current and that they are legally authorized to offer title loans within the state. Do all you can to understand your citywide regulations and rules covering online title loan companies. While title loans are allowed in all cities in Texas, some cities and local jurisdictions have specific laws that regulate the amount you can borrow and what happens if a lender repossesses your vehicle.

Call Texas Title Loans at 844-243-3195 if you have any questions about Texas's current title loan regulations, which may change in 2026.