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How do car title loans work in Virginia?

I recently had a root canal done, and I highly recommend avoiding them at all costs. Of course, the bill arrived a few weeks later, and even with insurance, it’s a bit more than I anticipated. I’m thinking about taking out a car title loan to help cover the cost, but how do car title loans work in Virginia?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Car title loans are short-term loans that provide you with 25-50% of your car’s value. They are secured using your car as collateral, meaning if you don’t repay the loan, the lender can repossess your vehicle. In Virginia, title loans are legal, but lenders must follow strict guidelines.
Here’s what you need to know about title loans in
Virginia
:
  • You can cancel your car title loan by returning the money and informing the lender by the end of the following business day.
  • For title loans $700 or less, the maximum interest rate is 22% per month, 18% for title loans between $701 and $1,400, and 15% for title loans over $1,401.
  • The term must be between 120 days and 12 months, and there are no extensions or renewals.
  • You can pay the loan early with no
    prepayment penalty
    .
  • The monthly installments must be equal, and the late fee cannot exceed 5%.
  • Before repossession, the lender must provide notice at least ten days in advance.
  • Before selling the vehicle, the lender must inform you at least 15 days in advance and include how much you owe. They cannot charge storage fees, and you can pay the balance and reclaim your car anytime before the sale.
  • If the car sells for more than you owe, they must return the surplus within 30 days. If sold for less, you are not responsible for the difference.
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