Minnesota expressly regulates motor-vehicle title loans. A non-pawnbroker that uses a vehicle title as collateral for a qualifying consumer loan must hold the appropriate Department of Commerce license, comply with Minnesota pawn-transaction protections, and stay within statutory limits on interest, fees, and charges. Read the contract, payment schedule, lien terms, and default provisions before using a car as collateral.
Last reviewed: August 13, 2026. This page provides general consumer information, not legal advice.
Are title loans legal in Minnesota?
Yes, but Minnesota law imposes specific requirements on qualifying motor vehicle title loans. Minn. Stat. §47.602 applies when a non-pawnbroker uses a vehicle title as collateral for a consumer loan with principal or an advance of $1,000 or less and a required payment within 60 days exceeding 25% of the principal or advance. The lender must be licensed as an industrial loan and thrift company or regulated lender, comply with §325J.095, and may not collect aggregate interest, fees, or charges beyond §325J.07.
The statute exempts banking institutions, credit unions, automobile dealers, and transactions under chapter 53C. Confirm the lender’s legal name and license type instead of relying on an online ad.
Sources: Minn. Stat. §47.602 and Minnesota Department of Commerce title-loan guidance.
Minnesota title-loan rules at a glance
| Topic | Minnesota requirement or consumer check |
|---|---|
| Covered consumer loan | §47.602 defines a covered consumer loan as principal or an advance of $1,000 or less with a minimum payment within 60 days greater than 25% of principal or advance. |
| License | A non-pawnbroker title lender must have a valid Commerce license as an industrial loan and thrift company or regulated lender. |
| Charge ceiling | Aggregate interest, fees, and other charges may not exceed the amounts permitted by §325J.07. |
| Additional protections | The lender must comply with all provisions of §325J.095, Minnesota’s pawn-transaction protections. |
| Exempt entities | Banking institutions, credit unions, automobile dealers, and chapter 53C transactions are excluded from §47.602. |
| Lien | The Department of Commerce says the lender places a lien on the title, so the vehicle cannot be sold without paying off the loan and interest. |
| Vehicle value | Vehicle value and existing liens can affect an offer; neither replaces the statutory charge limits or the written agreement. |
| GPS or starter device | Commerce warns that some lenders require GPS tracking or a starter-interrupt device. Identify any such requirement before signing. |
| Repayment | Compare the payment amount and due dates with your budget. Commerce warns that the amount offered is not the same as what is affordable to repay. |
| Unlicensed online offers | Commerce warns that some online title lenders are unlicensed and do not comply with Minnesota consumer-protection laws, including limits on interest and finance charges. |
| Complaint | Contact the Minnesota Department of Commerce for complaints or suspected violations and retain the contract and payment records. |
What to review before applying
Verify the lender’s license before providing title information or signing. Ask for the legal entity name, Commerce license category, APR, finance charge, amount financed, total of payments, payment schedule, itemized fees, lien filing, default terms, repossession procedure, and payoff amount. The Department of Commerce directs consumers to verify that an auto-title-loan company is licensed as an industrial loan and thrift company or regulated lender.
Do not sign a blank title transfer or agreement with missing rate, fee, or payment fields. A GPS or starter-interrupt device can materially affect access to your car; determine whether one is required before accepting.
Default and repossession
Missing a payment can put the vehicle at risk. Minnesota Commerce explains that a title loan uses the vehicle title as collateral and that the lender can take the vehicle if payments are missed or the loan is not repaid on time. Keep the complete agreement, every notice, the payment history, a payoff quote, and a record of any personal property in the vehicle.
If you receive a default or repossession notice, ask for a written accounting promptly. Preserve documents and seek legal advice quickly when transportation or a sale deadline is at stake.
Alternatives and assistance
- Local resource navigation: 211 can help locate food, housing, utility, and transportation support.
- Credit union or bank: ask about a small personal loan, payment plan, or hardship option before pledging a vehicle.
- Commerce complaint: Minnesota Commerce lists complaint assistance at its consumer contact page.
- Federal complaint: submit concerns about covered consumer-financial products through the CFPB.
Cities we serve in Minnesota
Minnesota location pages remain subject to the execution plan’s lender-relationship and quality review. This statewide hub is the source for Minnesota title-loan rules and borrower checks until individual local destinations are validated.
Frequently asked questions
Who can make a covered Minnesota title loan?
A non-pawnbroker using a vehicle title as collateral for a covered consumer loan must be licensed by Commerce as an industrial loan and thrift company or regulated lender.
What charges can a covered title lender collect?
Under §47.602, aggregate interest, fees, and other charges may not exceed the amounts allowed by §325J.07.
Does Minnesota law apply to every vehicle-secured transaction?
No. §47.602 excludes banking institutions, credit unions, automobile dealers, and chapter 53C transactions.
Can a lender require a GPS device or starter interrupt?
Commerce says some lenders require one of these devices. Ask about it and read the agreement before signing.
Where can I complain about a lender?
Contact the Minnesota Department of Commerce and keep the contract, notices, and payment records with your complaint.
