Auto loans or car title loans in Canada are ways to borrow money by putting up certain collateral: your car or any other vehicle you own. Essentially, you use your car as a promise that you will pay the loan back; if not, you potentially risk losing it.
As you start paying the loan back, you continue using your vehicle as you normally would. Typically, auto equity loans or car title loans in Canada are short term, ranging from three months to three years.
Banks and credit unions do not offer car title loans but you can be granted one from alternative lenders in store and online. Car title loans in Canada usually have high-interest rates and fees, making them an expensive option.
If you don’t do your research and don’t know what to expect from the lender in terms of standard practice, car title loans are also risky given that you could lose the collateral you put up.