CAR TITLE LOAN
REGULATIONS IN TEXAS

Most financing companies that offer short term loans and secured loans are licensed by the State of Texas. However, a bit more goes into regulations that govern online title loan companies in Texas. Therefore, you need to understand Funding Regulations and how they affect residents in our state. The Texas Office of Consumer Credit Commissioner covers many of these updates. Also, stay on top of recent changes to State Statutes with the Texas Department of Savings and Mortgage Lenders. Take note some regulations can overlap between different state entities.

Besides state and federal regulations, each city may have rules for companies that offer title loans in TX. For example, Dallas has various citywide ordinances restricting the amount you can borrow. Other cities such as Houston and San Antonio allow title loans but have consumer protections if a lender ever repossesses your vehicle. Some laws limit the amount of money anyone can borrow by using their pink slip as collateral. Before getting a vehicle equity loan, check with your city to see if they have additional codes and regulations.

Lending Laws For Texas Title Loan Companies

Before signing off on a title loan, evaluating the different lending terms and repayment amounts from multiple lenders makes sense. This includes a complete explanation of the fees and expenses added to your loan. Installment and payday loans operate under the same format. These lenders must also break down the finance costs and other possible charges. They must also explain your rights as a consumer in simple language. For example, you have time to get your vehicle back after it's repossessed. Any lender must supply documentation detailing what you can do if they take your car and what their process is to sell the vehicle at auction.

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 contract, and they should specify the process and timeline for you to get 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 exact payment terms, which consist of the total number of payments and the total amount of interest. The contract should break this down for the life of the loan. It's worth noting that it doesn't matter which type of short-term loan this applies to. It can be a payday loan or a car title loan. It will qualify if it's determined to be a high dollar amount.

If you pay off your title loan early, you should not be charged an early payment penalty. In the past, some lenders have used the threat of bringing a criminal charge against a customer if they miss a payment. They would do this if a customer missed a payment or defaulted. 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. Run from any company that threatens you with that, as they likely have no regard for other consumer protections.

You can prevent your vehicle from being repossessed in the case of a bounced check or debit payment. It requires three steps.

1. You must call the lender and tell them there's been an error in your bank account, and the payment won't go through.
2. You must email the lender with the same information.
3. You must 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. This letter must be postmarked when you speak to the title loan company's representative.

Once you have taken those three steps, the lender must allow you to make reasonable arrangements to make up the payment and get back on track with your loan payment schedule.

Choose A Title Loan Company in Texas That Follows Local Regulations

Every financing business needs to post a copy of its current license in a visible location, whether it offers store-front financing or online title loans. Online lenders in Texas must prominently display their state licensing details on each site page. This also applies to companies that provide payday loans and cash advances. Texas regulations do not distinguish between online lenders and retail cash advance companies.

Ensure your lender's license is current and they are legally allowed to offer loans within the state. As mentioned above, do all you can to understand your citywide regulations and rules covering online title loan companies. While title loans are allowed in all cities within Texas, some cities and local jurisdictions have specific laws that regulate the amount of money 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 for 2025.