To help pay the bills, you took out a car title loan. Now that your financial picture has improved, you have paid off the loan. What you would really like now is to get the original title to your vehicle. How do you go about doing so?
What Is A Car Title Loan?
A car title loan is a secured loan in which a borrower uses a vehicle as collateral. At Embassy Loans of Florida, potential borrowers fill out an application and the loans are processed usually in an hour. The borrower still gets to use the vehicle, but the lender holds the original title until the loan is fully paid. A lien is placed on the title document and remains there until the loan is paid in full.
The Procedure Varies By State
Each state has different rules regarding vehicle titles. In states where titles are still processed manually, you will have to visit your local state department of motor vehicles. When the last payment on the loan is made and the payment clears, the title loan company will send you the original title. That title will still have the lender on it as a lien holder. The lender will also send you a payoff letter confirming the release of the lien. You will need to take these items to your department of motor vehicles office where you will apply for a new title. The state makes sure that the lien is satisfied, and you are issued a new title. This normally takes a few weeks. You receive the new title, free of any liens, in the mail.
Some states process vehicle titles electronically. In those states, the lender will notify the state department of motor vehicles that the title loan is paid. The department then issues a new title without the lien on it. You receive the title in the mail. In states that process electronically, borrowers do not need to do anything. When in doubt, you can always call or visit your local department of motor vehicles office.
Research Before Taking Out Title Loan
To make sure you understand the process, do some homework prior to taking out a car title loan. Find out what the process is for obtaining a free and clear original title in your state. Call the state department of motor vehicles or department of transportation in advance so that when your loan is paid off, you can obtain your vehicle’s title quickly.