What is the process?

The maximum amount of the loan is determined by the collateral. Typical lenders will offer up to 50% of the car's resale value, though some will go higher. The borrower must hold clear title to the car; this means that the car must be paid in full with no liens or current financing. Most lenders will also require the borrower to have full insurance on the vehicle.

Payment schedules vary but at the very least the borrower has to pay the interest due at each due date. At the end of the term of the loan, the full outstanding amount may be due in a single payment. If the borrower is unable to repay the loan at this time, then they can roll the balance over, and take out a new title loan. Government regulation often limits the total number of times that a borrower can roll the loan over, so that they do not remain perpetually in debt.

If you cannot payback the loan or are late with your payments, the Title Loan lender may seek to recover your car and sell it to offset what you owe. Typically title loan lenders choose this option as the last resort because it may take months to recover the vehicle, rising costs of repossession, auction costs, court costs and more. During this time, the title loan lender is not collecting payments yet the vehicle is depreciating. Most states require the title loan lender to hold the vehicle for 30 days to allow a borrower to catch up.

Source: Wikipedia