Car title loans are short-term loans secured by the borrower’s vehicle. They provide a way for low-income borrowers and those with poor credit histories to raise cash for a short period of time, typically 30 days or less. At the end of the loan period, the borrower must repay the loan in full, including interest.

If the borrower is unable to repay the loan (which is common), most title loan offices will allow the loan to be refinanced. Other loan offices require that the existing loan be repaid in full and then, 24 hours later, a new title loan be made. Whether the loan is refinanced or a new loan is created, the monthly interest is again charged. If the loan is not repaid in a timely manner, then the lender may repossess the vehicle. Most lenders will have kept a copy of the car keys to make the repossession easier. Some even install GPS devices beforehand to make the car easy to locate.