A vehicle title loan is a type of loan wherein the vehicle title serves as collateral to cover for the loan amount. Because the loan is secured by the vehicle title, the amount of loan granted to the borrower depends on the value and condition of that vehicle. Any kind of vehicle – cars, trucks, motorcycles, ATVs, and even trailers – as long as they have titles, can be used to secure the loan.

Vehicle title loans are usually short-term loans. People avail of vehicle title loans for various reasons, including refinancing an existing vehicle title loan. There are those who need money fast and cannot wait for a lengthy processing time. Companies offering vehicle title loans do not run credit checks, thus the quick release of funds. People with bad credit can also avail of a vehicle title loan. Companies just have to verify the vehicle title being used as collateral. Some companies also need proof that the borrower is gainfully employed or has other sources of income to pay off the loan.

In case of failure of the borrower to pay back the loan within the agreed time, the lending company will  take possession of the vehicle and sell or auction it off to recover their money.