Title Loan Laws & Regulations To Know In California

California Title Loan Lending Laws

Are you thinking about getting a car title loan from a licensed lender in California? The guide below about lending laws, interest rate caps, and repossession rules should help you understand your rights under state regulations.

Important Disclaimer: This lending information is for educational purposes only and does not constitute financial or legal advice. Title loans are high-cost credit products, and you risk vehicle repossession if you default on the loan. Consult a financial advisor or consider other low-cost loans before proceeding with a title loan in California.

Assembly Bill 539 (the Fair Access to Credit Act) took effect on January 1, 2020. This major legislation established strict interest rate caps for consumer loans in California, ranging from $2,500 to $9,999. Before this legislation, there were no effective interest rate caps on title loans in California, and many lenders charged rates that made repayment very difficult. This legislation has fundamentally changed the title loan industry in California.

What To Know About Title Loan Requirements & Regulations In CA

A title loan is a secured loan secured by a vehicle's title. In California, most licensed lenders can provide funding in as little as one business day for loan amounts of $2,500 or more. You'll keep possession of the vehicle during your loan repayment term, and your lender will place a lien on the vehicle until the loan is fully repaid.

Unlike unsecured loans from a bank, title loan lenders focus on the equity value of your vehicle rather than your credit history. While your credit rating is not a primary underwriting factor, a lender must still assess your ability to repay the loan, typically using bank statements, W-2s, or pay stubs.

 
California does not set any vehicle-specific requirements for lenders when underwriting title loans. Instead, title loans fall under the same regulatory requirements as other consumer loans issued within the state. Most lenders require the following:

Vehicle Age: Typically, a manufactured date of 10 years or less.

Mileage: Under 100,000 miles.

Ownership: You need a clear lien-free title.

Value-to-Loan Ratio: Prequalify with a vehicle valued at at least 2x the requested loan amount.

DMV Registration: Up-to-date registration on your vehicle

Car Insurance: Not always required, but most lenders require comprehensive vehicle insurance.

Minimum Loan Amounts and California Title Loan Interest Rates

In California, $2,500 is often the minimum amount you can borrow from most companies offering consumer loans. Loans under this amount aren't commonly offered by title loan companies as they're subject to different, more restrictive interest rates under California Lending Laws.

For title loan amounts between $2,500 and $9,999, lending laws in California cap the annual simple interest rate at 36% plus the federal funds rate (As of February 2026, with the federal funds rate at 3.625%, this sets a maximum APR of 39.625%). Even though this interest rate may seem high, this cap is among the lowest maximum rates for title loans in the United States.

 
Example Title Loan Scenario:

Loan Amount: $5,000
APR: 39.625% (36% + federal funds rate of 3.625%)
Payment & Term: $511 monthly payment over 12 months
Total Repayment With Interest: $6,137 ($1,137 of that is interest)

 
This scenario is an estimate for illustrative purposes only. Repayment terms, rates, and payments may vary by lender.

How Your Loan Amount Is Determined

Most licensed title loan companies in California determine your loan amount based on your vehicle's current resale value. These values can be obtained from resources such as Kelley Blue Book, NADA Guides, and other vehicle valuation services that provide real-time estimates based on recent sales of similar vehicles.

California lending regulations do not set underwriting requirements for title loan collateral, so lenders can typically set their own loan-to-value requirements for lien-free vehicles. Customers can benefit from this lack of regulation by obtaining multiple quotes based on different vehicle loan-to-value assessments, and loan amounts and underwriting requirements vary significantly among lenders.

***Unique Funding Amount Considerations*** Funding amounts for some classic and vintage vehicles in California may be assessed differently to see their true market value. These types of vehicles can be rare and difficult to evaluate given current market conditions. In these cases, a lender may require an independent appraisal to determine your loan amount for a title loan.

The Risk of Default and Repossession of a Vehicle From A Title Loan Lender In California

Repossession can occur upon a breach of contract. Your vehicle can be taken anywhere in California if you fall behind on payments. In some cases, it can also happen if the lender discovers that the information you provided is inaccurate. While this is serious, most lenders don't want to go this route as it costs them time and money to repossess a vehicle and bring it to auction. Many companies that offer title loans online will try to work with you and set up alternative payment plans so you can get back on track.

Under California repossession laws, a creditor may repossess a vehicle once payment is one day late. The lender is not obliged to give you prior notice before taking your car. Contact your lender if you can't make a payment on your loan.

A title lender must comply with California's title loan laws regarding repossession if they take your car. They must notify you after repossession, tell you where the vehicle is stored, and what you need to do to get it back. The car can be sold in as few as 15 days after you've received a "notice of intent to sell".

You should receive written notification within 60 days of the vehicle's repossession. This notification must include the lender's intent to sell the vehicle, and the lender must give you at least 15 days' notice before the sale. California law gives you the right to request a "reinstatement" once every 12 months and a maximum of twice over the course of the loan. You can reinstate your loan by paying the past-due payments plus all reasonable repossession costs. You'll still have an amount due to your lender if the sale price of your vehicle is less than what you owe. Conversely, if your vehicle sells at auction for more than what you owe, your lender must return any surplus funds to you (after accounting for the loan balance and reasonable repossession costs). If you believe your lender has violated state repossession laws, you can file a complaint with the DFPI at dfpi.ca.gov or by calling 866-275-2677.

 
This article was last updated for compliance on February 11, 2026. California Title Loan Laws and regulations may change. For the most current information, contact the California Department of Financial Protection and Innovation.