How to Get into the Business of Online Title Loans

It’s no secret that Americans, in general, are sinking into further debt each year. With the mounting deficit, most big banks are tightening their requirements to make access to financing more difficult. With millions of Americans strapped for cash, many of them are using short-term secured loans to get the funds they need, regardless of their credit. One of the most popular (and relatively new) products under the category is online title loans.

Title loans allow borrowers to use their vehicle title as collateral to secure the loan. The title can be to recreational vehicles, cars, boats, motorcycles, etc. Since people will always come across situations where they need to borrow quick cash during emergencies, the title loan industry has become successful, irrespective of the economy. Considering the interest rate that most lenders charge nowadays, it has become a highly lucrative business.

Apply for a License in your State

It is actually quite easy to become a licensed title loan lender in your state. Most of the states require the lending companies to acquire a license from the authorities in order to be able to start lending to the consumers. For this, you will probably need to pass an exam, after which you will be required to pay a certain fee for the license. Aside from getting a state license, your local government will also probably require you to buy a business license.

Get your online title loan business registered at the clerk’s office in your local county. This will require you to fill up a form and make a one-time payment as nominal fee.

You can either start a limited liability company or incorporate your own business. Either of the options will protect all your personal assets just in case a lawsuit is filed against you by one of your customers. For you to be able to incorporate, you will have to file with your state certain articles of incorporation and pay a fee for filing. In case you opt to make use of a limited liability company, you should file certain articles of organization and then pay a certain fee.

Get an Awesome Location

This is very important. Although your business revolves around online loans, having a brick and mortar location can be an added bonus. Customers will trust you if you provide them with a reliable address where they can locate you, even if they do not intend to visit your store. One of the best locations is to find a place with high traffic. This will give potential customers and existing customers to drop in and have a talk while they drop by. It is a great investment if you could lease an office located in a commercial hub that is surrounded by other important businesses as well.

Draft a Terms and Conditions Contract

Set up terms and conditions that you will provide to all of your borrowers. In order to protect your interest as a title loan lender, you need to draw for your company some secure legal contracts and make sure that all of your borrowers are made directly responsible for the money that they borrow from your company. Carefully consider the rate of interest that your company will charge for the loans and late fees in case your borrowers do not make their payments on time.

Purchase the Tools of the Trade

Get the right equipment to service your industry. For online title loans, not much equipment is required besides the basics. For example, you’ll need an office, internet, a phone, a unique domain, hosting, and CRM software to keep a close track of every loan lend out to customers. Also, do not forget to invest in an eye-catching signboard to be put up in front of your business office.

Advertise Online and Through Print

This is a very crucial step. The competition is fierce out there, and even if your company offers one of the best title loan plans in the market, you will get customers only if you let people know about your company’s existence. Invest a lot of your attention, time and even money in promoting your business and advertising it as much as possible. You can start by advertising on the radio, television and most important of all, the internet, at really affordable rates. Also do not forget to put ads in the daily newspaper in your locality, state, and country. If you have the capital, advertising on billboards are also highly effective and ensures visible returns in most cases.


  •    Always make sure to outline clearly the consequences of possible default by your borrowers. Make it very clear that you will repossess their car and then sell it as you wish if they fail to repay the loan.
  •    The Online title loan business is risky. Sometimes your borrowers will not pay the loan so equip yourself efficiently to repossess their car and sell it.