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

    Take Action

    The Fair Lending 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 Fair Lending Act will finally give consumers relief and make title loans fair and affordable by capping interest rates at 36%. The Fair Lending Act was first introduced in 2018. Read about the campaign’s progress so far.

     

    Help us Fight Predatory Title Loans!

    Join us in fighting for a 36% interest rate cap on title loans in Illinois. Sign the petition today! Contact Jody at jblaylock@heartlandalliance.org if you are interested in getting more involved.

     

    In the News

    Read more about the legislation in the news:

     

    The Fair Lending Act Steering Committee

    The campaign for a 36% interest rate cap is led by a Steering Committee which includes AARP Illinois, the Chicago Urban League, the Financial Clinic, Heartland Alliance, Illinois People’s Action, Illinois PIRG, the Shriver Center, the State Innovation Exchange, and Woodstock Institute. We are grateful for their partnership and leadership in this work.

    Content related to this policy

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