Title Loans in North Carolina: Know Your Rights
October 24, 2025
Title Loans in North Carolina: Know Your Rights Key Takeaways Title loans are a fast way to get cash, but they can create a debt
info@carolinalaw.com
info@carolinalaw.com
Car title loans are frequently a last resort for consumers. The process involves taking out a loan with a high interest rate and offering a vehicle as collateral. If the consumer defaults on payments, the lender can legally repossess the vehicle. For that reason, these loans are banned in North Carolina. However, shady lending companies continue to openly flout the law and charge consumers outrageous interest rates. If you were victimized by a title loan or other personal loan with unlawful interest rates, contact us today for assistance. You may be eligible for monetary compensation and the cancellation of your loan.
Title loans have many names: auto title loan, car title loan, pink slip loan, collateral loan. Borrowers allow a lender to place a lien on their car’s title and hand over the hard copy of the vehicle title. After repaying the loan, the lender removes the lien and returns the title. Unfortunately, title loans are well established as risky and predatory due to their high interest rates. Companies often charge astronomical rates, up to 300% APR (25% monthly).
EXAMPLE
If you take out a $1,000 title loan at 300% APR (25% a month), you will pay $250 a month in interest for your first month. Even as you slowly pay down the debt, you are still paying 25% on the remaining balance. That means you can end up paying more than double the actual debt amount in interest after 12 months.
Title loans are marketed as fast loans (some sites offer the funds in just 15 minutes or less) with lesser amounts than a traditional bank will offer. Additionally, many companies do not run a credit check. This can be a helpful stopgap for consumers struggling to make ends meet. However, the risks are immense and can create a debt spiral that is nearly impossible to break.
As of 2025, title loans are illegal in North Carolina, 32 other states, and DC. However, a study by the Center for Responsible Lending found lenders blatantly ignore the law in at least 22 of those states, including North Carolina. The state’s lending laws do not permit car title loans, and payday loans were only legal for four years (1997-2001). However, the rise of online lending companies has made it easier for companies to conduct title loan business in our state illegally. You may be entitled to compensation if you have a title loan in North Carolina.
Several state laws protect our residents from predatory lending. Those include:
The NCFA regulates the interest rates a lender can charge for consumer loans of $25,000 or less (previously $15,000 or less). An out-of-state unlicensed lender that does not register with the North Carolina Commissioner of Banks (NCCOB) cannot charge more than 16% interest on these personal loans. Punishments for any lender that violates the NCFA are steep. The law subjects any offender to forfeit the debt, repay twice the amount of interest paid, and (if applicable) the return of any auto title.
The UDTPA is the name for North Carolina General Statute Chapter 75. It prohibits unfair and deceptive practices in charging and collecting debts. In many cases, the courts have affirmed that charging an illegal interest rate is a form of unfair and deceptive behavior. This statute entitles the consumers who sue shady lenders to attorneys’ fees and treble damages (three times the amount of damages). The UDTPA is a powerful tool that holds auto title lenders accountable for their illegal and predatory activities.
NCGS 24 sets maximum interest rates in a wider range of loans, such as home loans, credit cards, and others not covered in the NCFA. This chapter is another important aspect of pursuing compensation for illegal interest rates. Charging an interest rate that is considered usurious under North Carolina law results in penalties like loan forgiveness and double interest repayment.
Did You Know?
The CFPB found 1 out of every 5 title loans ends in repossession. Even if a consumer avoids repossession, more than half of these loans become long-term debt burdens.
Getting out of a title loan is a strenuous experience for the consumer. In some states, these loans are iron-clad and can often result in paying thousands more than the loan was worth or vehicle repossession. For North Carolina residents, the most effective way to get out of a title loan is to hire experienced title loan lawsuit attorneys who can clear your debt and possibly recover thousands on your behalf. Because title loans are illegal in the state, our residents have a strong foundation for taking legal action.
Hiring an attorney to sue a lender protects your interests while taking the pressure off you. Dealing with lenders who blatantly violate state law can be taxing and frustrating. The consumer protection attorneys at Maginnis Howard are well-versed in the ins and outs of the law and can go to bat on your behalf. We don’t charge for an initial consultation and take cases on contingency to eliminate the barrier to filing a suit. That means you don’t pay unless we recover compensation on your behalf. Moreover, because North Carolina’s consumer laws are so robust, you may be able to pursue attorneys’ fees as part of the settlement or verdict.
Auto title loans are a form of predatory lending that has been banned in North Carolina, but are still sold to consumers struggling across the state. If you have taken out an auto loan or have been victimized by unfair and deceptive practices, we want to help. We offer free consultations and take consumer cases on a contingency basis. Call (919) 526-0450 to get started, or visit one of our offices in Raleigh, Charlotte, and Fayetteville. Our intake staff may request documentation to assess your claim properly.
Consumers allege the following companies are continuing to offer illegal title loans:
If you have a title loan with these or any other company, contact us for help.
This depends on the company, however, many companies promise their services without a credit check or provide a loan even when your credit is poor. However, once you are engaged in the loan, they will apply extremely high interest rates.
Title Loans in North Carolina: Know Your Rights Key Takeaways Title loans are a fast way to get cash, but they can create a debt
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