Vehicle title loans, a type of short-term, high-interest loan, have been a source of concern for many consumers in Canada. These loans, which allow borrowers to use their vehicle as collateral, often come with steep interest rates and fees, making them a costly and potentially risky option for those in need of quick cash.
Title loans, also known as auto title loans or vehicle title loans, work by allowing borrowers to use their vehicle’s title as collateral in exchange for a loan. The amount of the loan is typically based on the value of the vehicle, and borrowers must repay the loan with interest within a specified time frame, often 30 days. If the borrower fails to repay the loan, the lender can take possession of the vehicle.