He was educated at Eton, and Peterhouse, Cambridge, which he left to become a member of Lincoln's Inn. He was called to the bar in 1775, and left by his father's and uncle's deaths with a handsome property and the family estates. He was a prolific writer on a variety of topics, and a vigorous contentious advocate of parliamentary and other reforms, and carried on a voluminous correspondence with all the literary men of his time.
He became the patron of Robert Bloomfield, the author of The Farmer's Boy, and secured for him the very successful publication of that work. Byron, in a note to his English Bards and Scotch Reviewers, ridiculed Lofft as "the Maecenas of shoemakers and preface-writer general to distressed versemen; a kind of gratis accoucheur to those who wish to be delivered of rhyme, but do not know how to bring forth." He died at Montcalieri, near Turin.
His fourth son Capel Lofft, the younger (1806-1873), also a writer on various topics, inherited his father's liberal ideas and principles, and carried them in youth to greater extremes. In his old age he abandoned these theories, which had brought him into the company of some of the leading political agitators of the day. He died in America, where he had a Virginia estate.