What Are Your Legal Rights in a Car Title Loan? (US Law)

by Karla Somers on June 26, 2012

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Sign-up for #ArmsTreaty Legal Response NetworkUsing a car title loan can be an easy way to get the money you need when you are in a financial jam. If you are thinking about requesting a title loan, you need to make sure that you understand your legal rights as a borrower. As with any type of loan, car title loans can be very beneficial. In every type of loan agreement, it is best to be careful when choosing the lender you work with. Understanding your legal rights is one of the most important parts of this process.

How Title Loans Work

The basic idea behind this type of loan is rather simple. When you need to borrow money, you give your car title to a title lender. In return, the lender gives you an amount of money based on a percentage of the car’s value. Most likely, the dollar amount of the loan will be less than what your car is worth. You have a certain amount of time to pay back the loan, which, according to TitleMasters, is usually 30 days. If you do not pay it back on time, the lender can take your car, sell it, and keep the money to pay off your loan.

Legal In My State?

In at least 16 states that explicitly allow title lending, this type of loan agreement is a legal way to borrow money. If, for example, you get an Atlanta title loan, you will be subject to Georgia laws, where the transaction is actually treated as a pawn. This means that you are essentially trading your vehicle’s title for cash. Knowing your rights in this type of agreement will help you meet the terms without issue.

Your Rights

When you assume this type of loan, there are a few different legal rights of which you should be aware. First of all, you are entitled to know the interest rate of the loan before you borrow. You are also entitled to know any other charges that could be incurred along the way. The lender must provide information about the terms of the loan, including how many days you have to pay it back. If there is a grace period after the due date, the lender should be forthcoming with this information as well.

As the borrower, you still have the right to drive your car while the lender has possession of the title. You do not have to surrender your vehicle as long as you complete your payments to the lender before the end of the loan term. During the course of the loan, the lender does not have the right to take your vehicle and sell it. In other words, your car is yours to drive, and the money is yours to spend as needed, as long as you make your payments on time.


If you are looking for the best car title loans Atlanta has to offer, or any other location, it is important to make sure that you do some research before you choose a lender. Not every title lender is reputable, and not all of them will be forthcoming about their fees and charges. Be sure to find one that is.

If you do not want any problems with your car title loan, take time to research options to help you choose a reputable provider. It is in your best interest to make sure that you are working with one of the most forthcoming lenders in your area. Choosing an established and highly rated company to work with will eliminate potential problems and help you get the money you need without complications.

Karla M. Somers is a freelance writer, small business owner and Georgia resident. She is a contributing writer for TitleMasters, an Atlanta based lender, serving residents in 13 counties.

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