Car Title Lending

About this Policy

Everyone should have access to fair and affordable loans. In Illinois, that is not the case. Title loans prey on Illinoisans by charging crippling interest rates as high as 360%.

Car title loans are similar to payday loans, but are secured by the title to the borrower’s automobile – meaning that if the person falls short on payments, the lender can seize and sell their car.

These loans trap consumers in debt they can’t repay, causing thousands every year to lose their car, a critical source of transportation to school and work. From 2013 to 2017, nearly 10% of title loan borrowers had their cars repossessed.

The predatory nature of title loans traps our friends in neighbors in a cycle of debt, often during times of crisis. Learn more about the impact or car title loans by reading Paul’s experience, and learn more about the title lending industry in Illinois.

Policy Highlights

    The Predatory Loan Prevention Act

    Currently, Illinois places no limit on how much a title lender can charge borrowers. Because of this, many title lenders charge upwards of 300%. This can result in $2500 in loans costing more than $15,000.

    28 states, including Indiana and Michigan, either cap interest rates on title loans at 36% or less, or prohibit title lending altogether. It’s time for Illinois to follow suit.

    The Predatory Loan Prevention Act (SB1792) would prohibit predatory interest rates by capping them at 36%. The Predatory Loan Prevention Act passed out of the Illinois General Assembly and is on its way to the Governor’s Office.


    In the News

    Read more about our efforts to rein in predatory title loans in the news:

    Content related to this policy

    Oppose SB2306 / HB3192 – Rate Cap Loophole

    SB 2306 and HB 3192 would insert the TILA Loophole into the Predatory Loan Prevention Act. The TILA...

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    Resource Guide: Affordable Alternatives to Predatory Loans

    Predatory loans can set-off a debt spiral and can lead to overdraft fees, loss of a bank account,...

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    Take Action: Urge Governor to Sign Predatory Loan Prevention Act

    Call Governor Pritzker's office at 312-814-2121 and urge him to sign SB 1792, the Predatory Loan...

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