If you’ve financed your car (got a loan for it), then there will have been a lienholder listed on your title.
Learn more: What is a Car Title?
Once you’ve paid off the car, you’ll be able to remove the lienholder so that the title is in your name only.
Learn more about removing liens from your vehicle’s title.
Like a branded title, a title with a lien has implications on transfers, ownership, and title records.
What is a lien on a car title?
When you finance the purchase of a vehicle, a lien will be placed on the title.
A lien on a car title serves as protection for the lender.
The lienholder will be listed on the certificate of title, which means they have an interest in the ownership of the vehicle.
Having a lien on the car title means you cannot sell or transfer the vehicle without first satisfying the loan and removing the lien.
If you default on your loan, the creditor will be able to exercise their rights as the lienholder to recoup the loss.
Once you pay off your car loan, you’ll be able to get the lien removed.
Do you get a title when you finance a car?
In most states, the title will be held by the lienholder or lender until your car loan is paid off.
Once you’ve paid off the loan in full, the lender will then mail you the certificate of title with the signatures and paperwork necessary to remove the lien.
In states where the registered owner has the title, the lienholder will still be listed and the same rules for selling or transferring the vehicle will still apply.
I paid off my car, how do I get my title?
Removing the lien from your car title is a straightforward process.
Before you are able to do so, you’ll need to:
- Pay off your loan in full.
- Receive notice from your auto lender.
After you pay off the loan, most auto lenders will complete their end of the title release process within 1 to 2 weeks.
After the loan is satisfied and the account is closed, it will usually take anywhere from 4 to 6 weeks for you to receive the title in the mail.
Note that in some states, the lienholder will notify the Department of Motor Vehicles and the title records will be updated automatically. While other states require you to file some paperwork.
When you are required to file your own paperwork, the process is similar to that of a title transfer. You can learn more about that here: How to Get a Car Title
Depending on your state, you may have the option of removing the lien:
- In person at your local DMV office.
- By mail.
- Online.
To remove a lien from the title:
- Have your certificate in title in hand and confirm that the lienholder has signed and dated the lien release section.
- Complete the title release section yourself.
- Fill in your own information in the new registered owner section.
- Complete any necessary Statement of Facts of Lien Release forms in order to exempt the transaction from taxes and inspection requirements that are typically required during a standard title transfer.
You may need to pay a title transaction fee of $10 to $25 or more.
After submitting the paperwork and fees, you should receive your new title without the lien holder listed within a few weeks.
For more information and specific requirements and forms, please visit the official website for your state Department of Motor Vehicles.