What happens when my seller is fiancing the car, and I am going to finance the car when I purchase it.. how does my finance company get the title?

First off are you taking over this loan? If so the bank that has finance this car should already have the title. Also the seller should have a copy for his or her record.

No, I have a loan, and he needs to pay off his... so how does my bank get the title..?

Your bank would get the title from the finance company that presently holds the title once it is paid off by your new finance/loan company. You will probably get a Memorandum of Title.

The first lien/seller's lien needs to be paid prior to the title being transferred to you. Once the second lien/your lien is established, your bank should pay off the first lien; the first lienholder will then issue a lien release. The title can then be reissued in your name with your lienholder listed on the title.