What is a Title Loan?

California Title Loan Business Startup

Start a Title Loan Biz

A title loan is a short-term loan on your car or truck. Some lenders will make a loan on a motorcycle, boat or RV as well. To qualify for a loan, you must have the title to the vehicle in your name. If title is held in both you and your spouse’s name, both of you must apply for the car title loan.

Generally, the title to your vehicle must be “clear.” That is, you cannot owe another lien holder money against the title. Some lenders will make a car title loan if the amount owed a previous lien holder is less than 25% of the “low book” value of the vehicle. You can estimate the low book value of your vehicle here: NADA.

A “free and clear car title” means that you and/or a co-owner (spouse) own your vehicle, with no unsettled loans or judgments against it. This is a requirement to be eligible for a title loan by the majority of title loan lenders; often called “pink slip loans.”

If you do own your car, a title loan is a fast and easy way to get the money you need. All you need to bring into the title loan store is a “clear title,” valid government issued ID, and proof of income. Bring payroll stub, bank account statements, utility bill…

We offer 2 methods to invest in our “How to Start a Car Title Loan Business:”

  • Immediate download in Adobe Acrobat: $277.95
  • We’ll print and ship it to you: $397.95

You get cash and your car serves as collateral for the loan.

Car title loan lenders rarely use your credit ratings when determining your qualification for a title loan or the loan amount.

The following items are required to start the title loan approval process:

  • Clear Car Title to Your Vehicle
  • Your Vehicle (for inspection only) A few lenders still require a set of keys.
  • A Government-Issued ID
  • Proof of Income
  • Proof of Residence

The title loan process typically takes about 30 minutes. Many title lenders provide the loan proceeds in cash. Others will give the borrower a check or a debit card. Some title lenders ACH the loan proceeds into the borrower’s checking account. A lot of this depends on whether you’re an Internet car title loan lender or a “brick-n-mortar” store front lender.

The lender’s ability to refinance a title loan is subject to state laws, but it is available where applicable. Refer to our “How to Start a Title Loan Business Manual” for your state’s laws. Certain restrictions may apply. If applicable, you may refinance a loan by paying the interest and fees. Your new loan will then pay off the previous loan, which will then be due on your next pay date.
We offer 2 methods to invest in our “How to Start a Car Title Loan Business:”

  • Immediate download in Adobe Acrobat: $277.95
  • We’ll print and ship it to you: $397.95


Start Title Loan Business-California

Start Title Loan Business in California

You’re considering a title loan business startup? Get our “bible” and you can stop with the “Googling” and finally launch your new title loan business. Start a Title Loan Business

California Title Loan Business Startup“Title loan lenders are utilizing a section of the California Finance Lenders Law that permits virtually unlimited interest rates for certain secured loans higher than $2,500. In this case, car title lenders focused on sections 22303 and 22304 of the California Finance Lenders Law, the state’s grab bag for regulating small-scale lenders.”

NOTE: Broken links occur! Government web sites often move links!! Work your way around this from the home page.

California Title Loan Business Startup & Laws

California Department of Business Oversight

California Financial Lenders License

California Department Financial Institutions

California Department Motor Vehicles

California Industry Publications


Car title loans – often called “pink slip loans” – made in California in which the consumer is allowed to drive their automobile should be made in amounts of $2501 and above. If you plan to loan 70% or less of the WHOLESALE Kelly Bluebook value, then the minimum wholesale value would be $3573.00.

Q: What licenses are available in California?

There are two state lending licenses for offering title loans. Loans made under the Autopawn Loan program are made pursuant to a California Pawnbrokers License and loans made under the Consumer Loan Program are made pursuant to a California Finance Lenders License.

Q: How much can a consumer borrow?

A: Generally you loan a percentage of the wholesale value of the vehicle, and take various factors into consideration such as the year, make, model, mileage, and condition of the vehicle. If the consumer would like to keep the car and drive it, you will also consider their debt to income ratio as well as their ability to repay the loan and make the monthly payments.

Q: What if the car is not paid off?

A: To make a title loan, the car must be paid off – or almost paid off. For example, if the consumer owes less than 25% of the wholesale value of the vehicle, the consumer may still qualify for a loan.

Q: What if the consumer has lost their title?

A: That’s OK, you can still approve the consumer for a title loan even if they do not have the Title. However, it must be a California registered vehicle, it must be paid off, and they must be the registered owner of the vehicle.

Q: What if the vehicle is not registered in the title loan applicant’s name?

A: If the consumer has the title to the vehicle and it was signed off properly by the previous owner, the consumer is still eligible for a title loan.

Q: What if it is an out of state title?

A: Generally the consumer is still eligible for a car title loan with an out of state title as long as the vehicle is paid off and the name of the consumer appears on the title as the registered owner of the vehicle.

Regarding car title loans, the loans are governed by the California Finance Lenders Law.

The law, part of the state Financial Code, applies to secured loans of relatively small amounts that are not regulated by other statutes.

The loans do not fall under California’s loose definition of predatory lending, which applies primarily to loans that are false or misleading.

Usury laws are not a factor. According to the state attorney general’s office, these laws aren’t applicable to lending institutions such as banks, pawnbrokers and other finance companies.

The lenders are utilizing a section of the California Finance Lenders Law that permits virtually unlimited interest rates for certain secured loans higher than $2,500. In this case, car title lenders focused on sections 22303 and 22304 of the California Finance Lenders Law, the state’s grab bag for regulating small-scale lenders.

The first section lays out rules for interest rates charged by licensed lenders. The second stipulates that these rules don’t apply to any loan worth more than $2,500.

“We spoke to lawyers about this,” said Gladstone at Growth Resource Group, based in San Juan Capistrano. “They determined that this allows us to charge any interest rate the market will bear for loans over $2,500.”

He says his firm was the first to offer car-title loans in California in 1995. Competitors soon showed up, Gladstone says, creating a robust market in which interest rates can vary from 60 percent to 120 percent.

He estimates the size of the California car title loan market at about $20 million. It’s limited, Gladstone says, because lenders in this state must offer larger loans than elsewhere to be profitable, which requires customers in turn to own vehicles of commensurate value.

In other states, where car title loans are typically for under $1,000, it’s common for junkers to be used as collateral.

Gladstone acknowledges that he operates in a gray area of the law. But he believes he’s done nothing wrong. “The proper interpretation of the Financial Code,” he said, “is that if they don’t prohibit it, it must be legal.”

Dimitry Pertsovsky and Michael Sklyar ran a string of Bay Area pawn shops before deciding to get into the lucrative field of high-interest car- title loans. They said their firm, BSL Financial Services in Redwood City, now has about $2 million in active loans. Typically, the car title loans are made without credit checks.

In California, lenders say, the average car-title loan is for $4,000.


Car Title Loan Collections

Car Title Loan Collections

A new trend in car title loan and payday loan collections to track down debtors? Using social media such as FaceBook, Pinterest, Twitter, Instagram, etc. Payday loan and car title loan lenders are monitoring borrower’s social media accounts for clues as to a borrower’s ability to pay and where borrower’s are employed.

California Title Loan Business Startup

Start a Title Loan Biz

Text messaging, email, “friending” are all becoming popular with car title loan and payday loan collectors today.

Consumers just don’t have a clue! They’re revealing all kinds of private information enabling car title loan and payday loan collectors to get their money. Even the IRS is at it according to media reports.

Whether laws are being broken to collect on these outstanding debts is open to debate. Federal Trade Commission regulations don’t explicitly refer to social media. The FTC did address how text messaging can and can’t be used to lawfully collect debts. Regardless, it’s unlawful for a bad debt collector to harass a debtor or violate a debtor’s privacy. This often happens when debt collectors reach out to the relatives and friends of a debtor.

Horror stories abound of car title loan lenders sending text messages and making phone calls during which the debt collectors failed to disclose that they were car title loan debt collectors, threatening to sue and garnish wages from the debtors they were contacting, and revealing individuals’ debts to friends, families, and coworkers.

If you’re a payday loan or car title loan lender in need of new ideas for collecting bad debt owed to you and you’re tried all the typical skip tracing methods, read our Title Loan Collections Chapter in our “How to Start a Car Title Loan Business Bible.”


Car Title Loan Software

Car Title Loan Software for Your Business

Are you in the car title loan business? Or, do you want to start a title loan business but have no clue what loan management software is available? Do you know there are “off-the-shelf” software solutions for running a car title loan business?

We opened our first car title and payday loan store in California in 1997. We’ve “played” with all the loan management software solutions in the industry. We even screwed up and built our own; long since scrapped.

To start a car title loan business you need some straight talk about car title loan management software from a resource not having an agenda. Consider investing in our “Car Title Loan Training Manual” (300+ pages).

Our 300+ page title loan industry manual includes a lengthy chapter devoted to auto pawn and car title loan software. Not only do we thoroughly discuss the features to look for, but additionally, we include a complete list of the top title loan software solutions available in the marketplace today. This software chapter includes a list of the major players with phone numbers, web site addresses, and investmant requirements. We also include links to each auto title loan software company allowing you access to their free software demos.

Our team has more than 20 years experience with car title loans, payday loans and check cashing. Order our Auto Title Loan Training Manual today, read it, then pickup the phone and call us for free counsel.

We offer 2 methods to invest in our “How to Start a Car Title Loan Business:”

  • Immediate download in Adobe Acrobat: $277.95
  • We’ll print and ship it to you: $397.95

Available immediately in Adobe Acrobat or invest in the printed and shipped version. Need more info? Have a question?


Car Title Loan Profits

Car Title Loan Profits

Every entrepreneur wants to know how much money they can make in the car title loan industry!

Triple digit annual percentage rates (APR’s) are typical for car title loan stores. A  Missouri State Auditor’s Report revealed the average to be 200% to nearly 400%. Illinois approached 300%. Wisconsin averages 300%. Typical fees on a $500 loan are 25% per month; $125 month interest only. These are typical rates for car title loan companies having stores in states having fee caps. When operating in states not having prescribed statutes, you will experience even higher APR’s.

Car Title Loan ProfitsIt’s not uncommon for car title loan stores to minimize their APR calculations by failing to compute them properly. This is not necessarily intentional. Many operators simply don’t know how to calculate an APR correctly. This is not recommended. It can lead to serious problems, particularly after you become extremely successful. You will become a target. Your solution is to invest in vcar title loan management software. Our “Car Title Loan Bible” has a lengthy chapter devoted to this subject. Learn what to look for when choosing your car title loan software and check out all the vendors offering software.