Consider a normal loan from a bank. You go to the bank and ask for money. Based on your credit history, the bank will give you what it considers a "safe" amount, one that you will pay back to them later with interest. In this case there is no collateral. In the case of a title auto loan, you are going to lender and giving them the title- the ownership rights- to your vehicle. You are providing collateral to your loan- in exchange, the lender now gives you the money you need. They of course will want interest in the end like any other loan. These loans usually do not require credit checks, but can become very financially destabilizing if not paid off as soon as possible. Consult a professional consultant in this field if you wish to get one.
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