Car Title Loans In Canada: How To Borrow With Your Car
A car title loan lets you borrow against a car you own outright and keep driving it while you pay the loan back. It's one of the faster ways to get cash when your credit is poor, but your car is on the line if you fall behind.
Finances are tight these days. More than 1 in 4 working Canadians are living paycheque to paycheque,1 so it's easy to see why a quick loan against your car is tempting. Before you sign anything, this guide walks you through what a title loan really costs under Canada's 35% legal limit, what a lender can and can't do in your province if you miss a payment, and the cheaper options worth checking first.
Key Points
- A car title loan is a short-term loan that allows you to borrow money from your car's equity, using your vehicle as collateral.
- The lender registers a lien on your car until you repay the car title loan.
- You can use the funds from a car title loan to cover just about any expense.
- Typically, any financing on the car must be fully repaid to get approved for a car title loan.
- Since the car collateralizes the loan, there's a risk of vehicle repossession if you fail to make loan payments.
- Since January 1, 2025, no lender in Canada can legally charge more than 35% APR on a car title loan, and most fees count toward that limit.
What Is A Car Title Loan?
A car title loan is a short-term loan that lets you use your vehicle as collateral to borrow money. Until you fully repay the car title loan, your lender registers a lien on your vehicle. Typically, you need to own your vehicle outright, meaning you have no remaining balance on your car loan or liens against the title.
Your car collateralizes the loan, which is why these loans may be easily accessible, even for those with bad credit. However, if you miss payments, the lender may repossess your vehicle. These loans also tend to come with high interest rates, making them potentially expensive and risky.
Best Car Title Lenders
These lenders offer loans secured by a car you own. Each one sets its own rates, terms and fees, so check the details with the lender before you apply.
Risk-free · No obligation Take the guesswork out of borrowing Apply once with Loans Canada and get real pre-qualified offers from Canada's trusted lenders.Lender Amount Rate Term Apply Details 
Prudent Financial Services Equity Car Loan Up to $50,000 19.99% – 34.99% 6 – 48 months APPLY NOW 
LendDirect Secured Loan Up to $25,000 24.99% – 34.99% Not listed APPLY NOW Show More 
BHM Financial Title Loan Up to $50,000 Not listed Not listed APPLY NOW
Warning: Never Pay Before You Get The Loan
Fees like the appraisal and lien registration should be written into your loan contract. If a lender asks you to send money first, especially by e-transfer, a money transfer service or a prepaid card, walk away. In most provinces, charging a fee before you receive a loan is illegal, and it's a common sign of a loan scam.2
Car Title Loan Features
The following are the key features of car title loans:
| Car Title Loans At A Glance | |
|---|---|
| Loan Amount | Lenders typically lend up to 50% of your car's value. However, depending on the lender, loan amounts can be lower or higher. |
| Term Length | Car title loan terms are typically short, usually between 3 months and 3 years. |
| Interest Rates | Lenders tend to charge higher interest rates on car title loans than traditional loans, but no lender can legally charge more than 35% APR. |
| Funding Time | Loan applications for these types of loans are typically processed quickly, with funding to come shortly after, making them ideal for pressing financial needs. |
| Collateral | Your car, which you need to own outright. You keep driving it while you repay the loan. |
| Who Offers Them | Alternative lenders. Banks and credit unions do not typically offer car title loans. |
How Much Does A Car Title Loan Cost?
What you pay depends on the lender, your car and your credit, but there's a hard ceiling. Since January 1, 2025, it's a criminal offence for any lender in Canada to charge more than 35% APR, and a personal car title loan doesn't qualify for any of the exemptions.3 The APR includes the interest plus most of the fees the lender charges, so it's the number to compare between offers.
Here's what a $5,000 car title loan repaid monthly over 2 years would cost at three different rates:
Swipe to see all rates →
| 19.99% APR | 29.99% APR | 34.99% APRNear the legal limit | |
|---|---|---|---|
| $5,000 Over 24 Months | |||
| Monthly Payment | $254.45 | $279.54 | $292.57 |
| Total Cost Of Borrowing | $1,106.91 | $1,708.92 | $2,021.60 |
| Total You Repay | $6,106.91 | $6,708.92 | $7,021.60 |
Stretching the same loan to 3 years at 34.99% APR lowers the payment to $226.15 a month, but the cost climbs to $3,141.47, which is more than 60% of what you borrowed. That's why the shortest term you can afford is almost always the cheapest.
Fees To Ask About Before You Sign
Title lenders can charge several fees on top of interest.4 Ask for each one in writing:
| Fee | What It Covers |
|---|---|
| Vehicle Evaluation | To appraise your car and set how much you can borrow. |
| Title And Accident Searches | To confirm you own the car outright and check its history. |
| Lien Registration | To register the lender's claim on your car with the provincial registry. |
| Account Administration | A set-up or ongoing fee for managing the loan. |
| GPS Or Immobilizer Installation | If the lender puts a tracking or shut-off device in your car. |
| Rollover | To extend the loan if you can't pay it off on time, which adds more interest and fees. |
| Late Or Missed Payments | Lender fees, plus a non-sufficient funds (NSF) fee from your bank if a payment bounces. |
Do I Still Own My Car If I Take Out A Car Title Loan?
You still own your car when you take out a car title loan, but the lender registers a lien on the car until you repay the car title loan. The lien gives the lender the right to legally take possession of the car if you stop making payments for any reason.
What Is A Lien?
The lien is what makes a secured car loan, secured. It is a type of security interest that is placed on the car. It's meant to help ensure that the borrower will make their loan payments on time. If the borrower stops making payments on their loan or cannot afford to pay the loan off in full, the lender can legally repossess the car and sell it to recoup the cost of the loan.
Borrow Up To $50,000
Car Title Loan Eligibility Requirements
Yes, you can borrow against your vehicle's equity, as long as you meet a few criteria. Since your car is collateral for the loan, approval is usually easier than an unsecured loan. These are some general requirements to get a car title loan.
- Have full insurance protection for your car.
- Typically, your vehicle must be no more than 6–8 years old, but this is something you can discuss with your lender. Some lenders accept older cars, though a car with a rebuilt title may be harder to borrow against.
- You have to own the car outright. There cannot be any outstanding debt attached to your vehicle.
- You must be 18 or older and be in possession of a valid driver's licence.
- You must have all the appropriate registration papers for your vehicle.
Why Your Car Makes Approval Easier
Lenders say yes more often when something valuable backs a loan, because it gives them a way to get their money back if payments stop. Our own data shows how much that matters:
What This Means For You
Owning a home shows stability and gives the lender something of value behind the loan.
You don't need a home to get the same advantage. With a car title loan, the equity in a car you own outright gives the lender security, so your credit score doesn't have to carry the whole application. It's also why the amount you can borrow is based mostly on your car's value.
Can I Get A Car Equity Loan If I Have Bad Credit?
If you have bad credit, an auto title loan is probably the easiest way to get a loan. Since you secure the loan with your vehicle, your application is less risky to the lending officer reviewing your file.
If you've been turned down for a personal loan, you're not alone. In our study of personal loan applications, full-time workers were 46% more likely to be funded than the average applicant, while people who were self-employed, retired or between jobs had a harder time, because lenders put a lot of weight on steady, verifiable income.5 A car title loan works differently: your car's equity backs the loan, so your income and credit score don't have to do all the work.
Can You Get A Title Loan On A Financed Car?
As mentioned earlier, you typically need to own your car outright to be eligible for a car title loan. That means you must fully repay any loan used to finance the car.
That said, some lenders may be willing to provide second lien title loans, which are loans that let you borrow against your car even if you have not yet fully repaid your car loan. In this scenario, the lender providing the second lien title loan is second in line to the first lender who holds the original car loan. That means the second lienholder assumes more risk, which is why second lien title loans can be difficult to find and come with higher interest rates and stricter terms.
How To Get A Car Title Loan
To obtain a car title loan, follow these steps:
What Documents Do You Need For Car Title Loans?
Car equity loans are pretty straightforward and you can apply online. You simply fill out a short loan application. Most lenders will require the following:
- Personal Identification - This includes documents to verify your name, address, and phone number. Lenders usually accept a driver's licence, passport, or some other government-issued photo ID.
- Financial Details - Some car title lenders may want proof that you earn enough to cover your loan payments. Documents to show your income can include bank statements or pay stubs.
- Vehicle Ownership Documents - One of the most important documents you will need to bring is your vehicle registration or ownership papers. This is necessary to prove that you are the car's legal owner.
- Car Insurance - Lenders require that you have insurance on your car, so you may need to purchase it and provide proof.
- Vehicle Details - You'll need to provide information regarding your car's make, model, year, and mileage.
- Vehicle Inspection - Your lender may also require a car appraisal to verify its condition and value.
How To Strengthen Your Application
Your car backs a title loan, but most lenders still check that you can afford the payments. That means they look closely at where your income comes from and how it reaches your bank account, not just how much you earn. In our study, the source of your income mattered more than the amount:
You can't always change where your income comes from, but you can change how it's paid. Many lenders, including some title lenders, check your bank statements or pay stubs. Regular deposits into the account you apply with are easy to verify. Cash or transfers that arrive at different times are harder, even if the total is the same. That's why direct deposit can matter more than the hours you work:
How To Set Up Direct Deposit
Ask your employer's payroll department for a direct deposit form. For government benefits, sign up through your bank, your My Service Canada Account (CPP, OAS and EI) or CRA My Account (Canada child benefit and GST/HST credit). Give it a pay cycle or two before you apply so the deposits show up on your statements.
Tell The Lender What The Loan Is For
Lenders tend to say yes more often when a loan has a clear, specific job to do. In our study, loans with a set purpose, like paying off credit cards, a car repair or an emergency expense, were funded more often than the average application. Loans for other, less specific reasons were funded less often.
When you apply, say exactly what the money is for and have the paperwork ready, like a repair estimate from a shop or the bill you need to pay. If you're borrowing for a car repair, getting the work done also helps your car hold its value, which is what a title loan is based on.
Know Your Rights Before You Hand Over Your Title
Apart from the 35% limit, the federal government doesn't oversee title loans. The rules on licensing, repossession and what you owe afterwards come from your province.4 Here's what a title lender can and can't do. If you live in Ontario, our guide to car title loans in Ontario covers that province in more detail.
The Lender Can't Charge More Than 35% APR
Under the Criminal Code, "interest" includes almost every charge tied to the loan: fees, fines, penalties and commissions. Only a few things are left out, such as insurance and government fees.3 That means a lender can't keep the interest rate low and make up the difference with appraisal, admin or GPS fees. If an offer works out to more than 35% APR once the fees are added, don't sign it, and report the lender to your provincial consumer protection office.
What Happens If You Miss A Payment
A lender can't just take your car and sell it the next day. Your province's personal property security law sets out the steps it has to follow, and they're much the same as when you can't make your car payment on a regular car loan:
British Columbia is the only province where we confirmed a "seize or sue" rule that covers title loans. If the lender takes your car, the rest of your debt is wiped out. If it sues you instead and the car is later seized and sold to pay the judgment, it can only collect what the car sold for.7 In Quebec, a lender needs a court's permission to keep your car once you've paid back at least half of the loan.8 Our guide to Quebec car title loans explains how the province's rules work.
Car Title Loan Rules By Province
Swipe to see all rules →
| Written Notice Period | Can You Owe The Shortfall? | Lender Licence Required | |
|---|---|---|---|
| Alberta | 20 days | Yes | Yes32% APR or more |
| British Columbia | 20 days | NoSeize or sue | YesOver 32% APR |
| Manitoba | 20 days | Yes | YesOver 32% APR, or some loans with fees at any rate |
| New Brunswick | 20 days | Yes | Not required |
| Newfoundland and Labrador | 20 days | Yes | YesBank of Canada rate + 22% |
| Nova Scotia | 20 days | Yes | YesLender permit for all consumer lenders |
| Ontario | 15 days | Yes | Not required |
| Prince Edward Island | 20 days | Yes | Not required |
| Quebec | 30 days | Depends | YesBank of Canada rate + 22% |
| Saskatchewan | 20 days | Yes | YesFinancing corporation licence for lending companies |
Rules as of October 2026. In Quebec, the debt is wiped out if the lender keeps the car. If the car is sold under court supervision instead, you may still owe the difference. Quebec lenders also need a money lender permit.
GPS Trackers And Remote Shut-Off Devices
Some title lenders install a GPS tracker so they can find the car, or an immobilizer that can stop it from starting if you fall behind. Some also keep a spare set of your keys.4 Whether these devices are allowed depends on where you live, and the lender may charge you to install them.
Warning: Get The Device Rules In Writing
Before you sign, ask whether the lender will install a tracker or shut-off device, when it can switch the car off, and whether you'll get a warning first. A car that won't start can leave you stranded, so get the answers in your contract, not just a verbal promise.
Tell Your Insurer And Get Your Title Back
Depending on your province, your insurer may need to hear about the lien. Skip that step and a claim for a stolen or damaged car could be turned down, leaving you to repay the loan with no car.4 Once the loan is paid, have the lender take the lien off and confirm it's been removed. You can check for yourself with a lien search on your province's personal property registry.
What To Check In Your Contract
- The APR - With all fees included, it must be 35% or less.
- The total cost of borrowing - The dollar amount you'll pay on top of what you borrow.
- Every fee - Appraisal, registration, admin, device and late fees, with amounts.
- What counts as default - How many missed payments it takes before the lender can seize the car.
- Prepayment - That you can pay the loan off early without a penalty.
- The lender's licence - If your province licenses lenders (see the table above), the licence number should be on the contract or the lender's website.
What Are The Benefits Of Car Title Loans?
There are several benefits to using the cash value you already have but need to access, otherwise known as your car's equity. That said, there are also some potential drawbacks to car title loans. Make sure you weigh the pros and cons of car title loans before applying:
Pros
- Apply online and get approved within hours or days
- Good for bad credit scores
- Many lenders don't do a hard credit check
- No down payment required
- Usually a lower rate than a payday loan
- You still own and use your car
Cons
- The car secures the loan, so if you stop making payments, the lender can seize it
- Higher rates compared to other secured loans
- Extra fees add to the total cost of the loan
Is A Car Title Loan Right For You?
A car title loan puts the car you rely on at risk, so it only makes sense in a narrow set of situations. Answer these five questions honestly before you apply:
Are You Ready For A Car Title Loan?
- It's a one-time need: Is the money for an emergency or a one-off cost, not regular bills you'll face again next month?
- You can afford the payment: Would the monthly payment still fit your budget if your income dropped for a month?
- You have a backup plan: Could you still get to work and handle daily life if you lost the car?
- Cheaper options are ruled out: Have you checked whether you qualify for an unsecured personal loan, a line of credit or a payment plan with whoever you owe?
- The offer is clear and legal: Is the APR, including fees, 35% or less, and has the lender put every fee and any GPS device in writing?
Car Title Loans Vs. Alternatives
Before you put your car on the line, check whether one of these options covers what you need. Unlike a title loan, none of them puts your car at risk:
Swipe to see all options →
| Puts Your Car At Risk? | Credit Check? | Best For | |
|---|---|---|---|
| Car title loan | Yes | Many lenders skip a hard check | Fast cash when you own your car outright and your credit is poor |
| Unsecured personal loan | No | Yes | Fair or better credit |
| Loan secured by other assets | No | Usually | Borrowers with savings or home equity, which may get a lower rate |
| Credit card cash advance | No | No, it uses a card you already have | A small amount you can repay quickly (interest starts right away) |
| Payment plan | No | No, it isn't a loan | Being behind on a bill: ask the company you owe for more time |
| Non-profit credit counselling | No | No, it isn't a loan | Debt that's getting out of control; may lead to a debt management plan |
Final Thoughts
A car title loan can get you cash quickly when your credit makes other loans hard to get, and you keep driving your car while you repay it. But it's an expensive way to borrow, and it puts the car you rely on at risk.
Before you apply, make sure the APR, with every fee included, is 35% or less, and check your province's rules on lender licences and repossession. See whether an unsecured loan or a payment plan could cover what you need first. If a title loan is still the right fit, Loans Canada can help you compare offers from lenders in your province.
Car Title Loan FAQs
How is a car title loan different from a personal loan or car loan?
Can I get a loan against my car title if I'm still paying off my car loan?
How much money can I borrow with an auto title loan?
Will getting an auto title loan help to improve my credit?
How much does a car title loan cost in Canada?
What's the maximum interest rate on a title loan in Canada?
Are car title loans legal in Canada?
What happens if I can't repay my car title loan?
Can I sell my car if it has a title loan on it?
Can I get a title loan on a leased car?
Can I pay off a car title loan early?
Can I get a car title loan without a job?
Can I use a motorcycle, truck or RV for a title loan?
Sources
- National Payroll Institute, "Canadians are on a Financial Crash Course" (2026 Survey of Working Canadians), newswire.ca, September 22, 2026, accessed October 2026.
- Canadian Anti-Fraud Centre, "Grant and loan" scams, antifraudcentre-centreantifraude.ca, modified January 16, 2026, accessed October 2026.
- Government of Canada, Criminal Code, section 347, and Criminal Interest Rate Regulations (SOR/2024-114), laws-lois.justice.gc.ca, accessed October 2026.
- Financial Consumer Agency of Canada, "Title loans," canada.ca, accessed October 2026.
- Loans Canada, "Who Really Gets Approved For A Loan? Insights From Nearly Half A Million Applications," loanscanada.ca, updated October 27, 2026.
- Personal Property Security Act of each province, including Ontario's Personal Property Security Act, sections 63 and 66, and the Civil Code of Québec, articles 2758 and 2761, accessed October 2026.
- Government of British Columbia, Personal Property Security Act, section 67, bclaws.gov.bc.ca, accessed October 2026.
- Government of Québec, Civil Code of Québec, articles 2748, 2778, 2782 and 2784, legisquebec.gouv.qc.ca, accessed October 2026.
Additional Sources
- Government of Alberta, "High-cost credit business licence," alberta.ca, accessed October 2026.
- Consumer Protection BC, "High-cost credit," consumerprotectionbc.ca, accessed October 2026.
- Government of Manitoba, High-Cost Credit Products Regulation, web2.gov.mb.ca, accessed October 2026.
- Government of Nova Scotia, "Lender Permit," novascotia.ca, accessed October 2026.
- Nova Scotia, Personal Property Security Act, SNS 1995-96, c 13, canlii.org, accessed October 2026.
- Government of Newfoundland and Labrador, "High-cost credit businesses," gov.nl.ca, accessed October 2026.
- Financial and Consumer Affairs Authority of Saskatchewan, "Licensing Requirements," on The Trust and Loan Corporations Act, 1997, sections 2 and 17, fcaa.gov.sk.ca, accessed October 2026.
- Office de la protection du consommateur, "High-cost credit," opc.gouv.qc.ca, accessed October 2026.
