Title Loans in North Dakota and What State Law Allows

Can you legally get a car title loan in North Dakota? The state has no law that mentions title loans at all. Two general laws apply instead, and each one caps the price far below what title lenders usually charge.

A title loan is a short-term loan secured by your car's title, which means the lender can repossess the car if you stop paying. In North Dakota, any lender offering one has to stay under one of two ceilings. The first is the general usury limit, which the state set at 9.204% for September 2026. The second is the 36% annual cap for licensed money brokers. The triple-digit rates that title loans carry in many states fit under neither.

The first law is the usury chapter, N.D.C.C. Chapter 47-14. Usury means charging more interest than the law allows. Section 47-14-09 caps the rate at 5.5 points above the average six-month Treasury bill rate, and the cap can never drop below 7%. The same section permits a $15 minimum finance charge and bans interest on unpaid interest unless the borrower signs a separate contract for it. The Department of Financial Institutions publishes the rate each month. In 2026 it ranged from 9.059% in June to 9.288% in January.

Several kinds of loans fall outside that cap. Loans above $35,000 are exempt. So are loans from regulated banks and credit unions, and bona fide pawn transactions under $10,000. A pawn transaction counts only when a licensed pawnbroker takes possession of the property being pledged.

The second law is the Money Brokers Act. It caps finance charges at 36% a year for lenders the DFI licenses. House Bill 1127 took effect August 1, 2025. It gave the Act its first definition of "loan" and let the DFI pull other financing products under the Act by order. The DFI says that which cap applies to a title lender depends on how that lender is licensed.

One consumer site says title loans are flatly illegal in North Dakota. The statute section it cites could not be verified. Industry pages describe title loans as legal but tightly capped. One of them puts the September 2026 limit at about 9.50%, which does not match the state's own figure of 9.204%. Use the state's number. A written answer from the DFI would settle the legal question. For now, an offer priced above 36% is outside both caps, and that is worth reporting to the DFI.

The sources we reviewed do not say what a repossession must look like here. They are silent on notice, on your right to catch up on missed payments, and on whether the lender must return any money left over after the car is sold. Ask the DFI before you sign anything. North Dakota's payday loan rules are a separate question.

The DFI says a money broker license is required to lend to any North Dakota resident, even if the lender has no office in the state. You can check any lender's license on NMLS Consumer Access at nmlsconsumeraccess.org.

An underwriter reads your bank statements line by line. Recurring payments to a lender stand out, and they usually trigger a request for a letter of explanation, which is a short signed note saying what the debt is and what you owe. An open loan with a monthly payment counts in your debt-to-income ratio, which compares your monthly debts to your income. A lien on your car can also surface.

If you already have a title loan, tell your loan officer now rather than letting underwriting find it. Ask whether paying it off before you apply, or before closing, helps your file. Then get the lender's release of the lien in writing. Your lender makes the final call on how the debt is treated.