How do car title loans work in Texas?

I’ve been building a shed in my backyard to hold my lawnmower and other tools, but the roofing material is more than I anticipated. I’d prefer to get it done quickly rather than wait a few weeks until I save enough money. I’ve heard car title loans are an easy way to get cash fast, but how do car title loans work in Texas?

Answer
The shed sounds like an excellent addition to any backyard. To answer your question car title loans are short-term, secured loans based on the value of your vehicle. The loan amount is typically 25-50% of the car’s value and secured using your vehicle as collateral, meaning the lender can repossess your vehicle if you don’t meet the loan terms. In Texas, car title loans are legal, but lenders must adhere to certain legal guidelines.
Here’s what you need to know for Texas specifically:
  • TheAPR on title loans in Texas can be close to 300%.
  • Texas has a 180-day limit for title loan contracts. The typical repayment period is 30 days, meaning you could extend the loan five times.
  • The lender can repossess the vehicle as soon as you default, and no advance notice is required.
  • Before selling the vehicle, the lender is required to give you 10 days’ notice and the total amount due. You can pay the total amount and retrieve your vehicle anytime before the sale.
  • If the vehicle sells for less than you owe, you are required to pay the difference, and if sold for more, the lender is not obligated to return any excess funds.
  • The lender must disclose the fees and interest rate, cost to renew, and show a comparison to alternate forms of consumer debt.
Waiting a few weeks until you have enough saved for the roofing material or saving on other expenses could be a better choice. Plus, you won’t have to worry about losing your vehicle.
If you want to save on your car insurance, download Jerry, an insurance comparison app that shops for low prices with over 50 different insurance companies for free!
Jack Walsh
Answered on Nov 30, 2021
Jack is an insurance specialist and writer living in Buffalo, New York. He has a BA from Union College and worked as an insurance agent with Jerry before joining our content team. He enjoys using data and research to break down complex subjects and convey a story. In his spare time, Jack enjoys cycling, cooking, and exploring Buffalo’s beautiful waterfront.
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