Illinois Department of Financial and Professional Regulation



What is an Auto Title Loan?

An Auto Title Loan is a short-term loan where the lender takes title to your car to secure the loan. This means if the loan is not repaid, the lender may take the car and sell it to get the loan money back. Most title lenders will only make the loan if you do not owe anything else on the car.

Who are Auto Title Lenders?

These are lenders that usually offer other high-risk loans like payday loans and tax refund anticipation loans.  These lenders target people who need funds in a hurry and who don’t have access to other types of financing like bank loans, charge cards or family members who can lend them needed cash. Title loan companies must be licensed to write consumer installment loans in Illinois.  A complete list of Consumer Installment licensees (CILA) is available here

Why should I be careful with an Auto Title Loan?

Title lenders secure the loan they offer you with the title to your car.  If you need your car to earn a living, you need to be sure you aren’t putting that job at risk if your car is repossessed.  These lenders collect high interest rates and charge additional fees for each loan they make. 

These loans may offer reasonable monthly payments for a period of time but then require the entire balance of the loan paid all at once – a balloon payment at the end of the loan – which may be much higher than the borrower can repay.  While you may need money in the short term, be sure to factor in the fees, the high interest rate and the possibility of losing your car.
What if I can't pay the loan off within the proper time?

If you can't pay off the loan, the company can, and frequently does, repossess your vehicle.  Once your car is repossessed, additional fees will begin to accrue and you won’t get your car back until all fees are paid.

How do I get out of a Title Loan?

When you borrow the money from a title loan company you sign a contract that says, “I will pay back the money I borrowed or you can have my car.”  Because you have given your promise to pay back the money, there are no easy  ways to avoid paying back the money you owe.

If you can, pay off the loan immediately and avoid being charged further fees and costs.  If not, you may have to borrow even more money from another source so that you can reclaim your car.