Learn More About Liens
If you need a financial resource to get back on your feet, there are a few options available! While there are plenty of choices for you to pick from, a title loan may be the best alternative!1 Not all loans are created equal, and some unsecured loan options may be difficult to qualify for if you don’t have a desirable credit score or financial background.
But with secured-based loans like title loans, you would only need to use your vehicle’s title to initially secure funding!1 That means the approval process could potentially be convenient and flexible for you to go through!1 Not only that, but if you qualify, you may get money in as little as 24 hours!3 However, you must know that title loan lenders place themselves as lienholders on your title if you sign the loan agreement. What does that entail?
A lien is a legal right or claim against assets, usually used as collateral for a loan to satisfy a debt. In the case of title loans, a lender will place a title lien on your title to ensure you will pay off the entire loan amount one way or another. You will only see the lien removed once you satisfy your monthly payments in full. If you start missing payments and fail to pay off a title loan, the lender can repossess your car and sell it to recoup their losses. It’s important to note that when your vehicle title has a lien, it automatically shows you do not own the car “clear and free”.
But a lien on the title doesn’t mean you’d lose access to your vehicle! When you inquire about car title loans serviced by LoanMart, you can keep your car while you repay the loan! Yet, to maintain that privilege, you’d have to be on time with your installments.
Liens can also be consensual or involuntary, also known as statutory liens. A voluntary lien is created by an action taken by the debtor, which you can generally find in mortgages on a house, or financing for other transactions, like title loans.
A statutory lien is a lien that is created by law or statute, typically in favor of a taxing authority. Examples of statutory liens include artisan liens, mechanic liens, and tax liens.
Also, some lien holders file liens with the government to let people know they’re interested in the asset or property. That way, a person who wants to purchase the collateral can acknowledge that the lienholder must remove the lien before making a transaction.
What Types of Liens are Available and How Do They Work?
It’s understandable if you’re looking at other collateral-based loans to weigh your options. You want to make sure you have a convenient resource that works for you! But, when you compare a title lien to other liens, you may find that a title lien may not be too troublesome. You can see how flexible a car title loan could be!1 Even if you’re not in the process of applying for emergency cash, you could benefit from learning about all types of liens.
Take a look at the different kinds of liens that are out there right now:
- Judgment Liens: This is a nonconsensual lien that comes from lawsuits. It gives a creditor the right to take control of a debtor’s real or personal property if they fail to meet their contractual obligations. If the debtor doesn’t have any property at the time of the ruling, it could apply to future acquisitions. Creditors can make judgment liens against individuals or businesses, allowing them to access their assets to satisfy the judgment. There are different ways to avoid a judgment lien, but the most obvious is simply paying what you owe to the creditor. Talk to your lawyer about the other options you can take to bypass this lien.
- Tax Liens: Out of all the types of liens available, a tax lien is one to avoid the most. The Internal Revenue Service (IRS) can place a legal claim against a taxpayer’s property if they fail to pay taxes owed to the government. That is known as a federal tax lien. Be aware that this lien isn’t just the result of unpaid federal taxes, as a local government may place liens for things like nonpayment of property. That can lead to a property tax lien. Unpaid taxes are tough to recover from! However, having a tax lien doesn’t mean the government will sell your property. Instead, it ensures that the tax authority gets the first claim over creditors that may be competing for the creditor’s assets. You must be on top of your taxes to steer clear of this lien; if not, you’d end up with a lot of financial trouble or outstanding debt!
- Mortgage Liens: A mortgage lien is different from other types of liens. Typically, this type of lien is another person’s financial claim to your home. Generally, this will last until you pay off a debt, and it can be either voluntary or involuntary. If you choose to not pay a contractor that worked on your house, a mortgage lien may be placed on it until they are paid. A lien on your property is not a good scenario! You do not want to start the foreclosure process. If you are a property owner, this is something to avoid. These are often on public record as well.
- Mechanic’s Lien: Different contractors or mechanics can attach this lien to the asset if the owner doesn’t pay back their services. A mechanic’s lien can ensure that they will be paid before anyone else in the event of a liquidation. That means that mechanic’s liens typically have a higher priority that demands your full attention. Many service providers, such as construction firms, builders, and dry cleaners, can place this lien onto personal assets.
With a car title loan, a lien doesn’t necessarily have to be something to be afraid of, but it is a part of a consequence that should be considered. Make sure that you pay your loan back on time to avoid repossession. When you get a title loan serviced by LoanMart, you will be able to see your loan agreement before you sign. Make sure to stay on top of your payment plan to maintain your installments.1
How Does a Lien Removal Work?
There are different types, such as outstanding liens, involuntary liens, etc. But not all liens can be removed in the same way. Now that you know how liens work, you may wonder how someone can remove them. Although there are several ways to get a lien removed, most people follow these two methods, depending on the type of lien:
Contest the Lien:
In some cases, a person can contest a lien by contacting the county recorder’s office and filing a Notice of Contest. Submitting that notice jumpstarts the procedure of pursuing foreclosure of the lien in court, which can be a long process. Once that begins, the individual that makes the claim, otherwise known as the claimant, must prove the lien is invalid. If the lienholder cannot counter that argument, the lien is dismissed.
Satisfy the Lien:
Paying off what you owe is sometimes the easiest option. Before you do that, you must review the terms of the lien with the lienholderto determine what you must pay. Sometimes, you can negotiate an amount you can pay off directly. After you complete your payments, you can draft a lien release document so the lienholdercan sign it; but it doesn’t end there. You must have the lien release recorded at the county recorder’s office to remove the lien from your asset.
Although those are general strategies to remove liens, there are other ways you could opt to do that:
Discharge in Trust:
- A discharge in trust is a strategy used to remove a lien with the help of a third party. Generally, the third party is a lawyer. If you’d like to make a payment but prefer removing the lien first, you could benefit from a discharge in trust. In this case, you could get a lawyer to request a lien removal directly to the lienholder. However, that doesn’t mean the lienholder wouldn’t receive money. Before a lawyer makes the action of requesting a lien removal, you may have to deposit what you owe into a trust account. As soon as the lienholder lifts the lien, they will receive those funds.
- In some instances, you could file a consent order/court order to have the lien removed. A court order works by having you place money into court that is equal to the value of the lien. In exchange for doing that, the lienholder will remove the lien. Through this method, you wouldn’t have to do anything other than go to court to request a lien removal.
- Something to keep in mind is that liens have expiration dates. While it’s more luck than anything else, liens may remain inactive due to a lack of settlements or resolutions. If a lienholder decides to pursue legal action after the lien expires, your lien will no longer be valid. Yet, you would have to take extra steps to remove the lien for good from your property. You will likely be recommended to seek consultation from a lawyer about this type of strategy.
As you can see, most lien release options might be difficult to get through. But removing a lien from a car title could be easy!1 There’s no need to stagger your way into lifting a lien from your title.
How Does a Title Lien Removal Work?
Many borrowers might expect to read groundbreaking tips to remove a title lien, but one piece of advice would suffice. The simplest way to remove a lien from your title is to pay the title loan in full. It may sound clear-cut, but there aren’t really any other options available.
But don’t stress! When applying for a title loan, you could find loan terms that work for your budget.1
If you face issues during repayment, a title loan agent from LoanMart could help you find different strategies to get you back on track! They could help you navigate your online portal, which keeps you informed about things like your due dates and monthly payment plans.
Don’t worry if you’re still asking, “How does a title lien work?” Title loan agents are available six days a week for extended hours to clear any questions you may have! Dial the toll-free number 855-422-7412 to speak with one today!
Getting Back Your Car Title
What happens to your vehicle’s title as soon as it’s lien-free? Would you have to do something to add your name to it?
Most title loan lenders begin the process of removing the lien the moment you finalize your installments. Typically, they will send you a confirmation of the final payment. Contact your lender if you don’t hear back from them once you have paid off the loan.
Some states may require you to fill out a form to remove a lienholder from a document. When you have access to the form, take it–along with your title and documentation from the title loan lender–to your local DMV to change your car’s title. Be aware that there might be a fee for doing that. Some lenders may work with an electronic system to make it easier for you to update your information.
If you want to add someone else to it, you might have to fill out a title request form, along with the information of the name you want to add. There might also be a fee you must pay, but you should receive your new title the same day.
What Kinds of Loans Work with a Lien?
Secured loans generally work with liens because they require a form of collateral as a condition of borrowing money. Any loan with a collateral-based structure will have liens to guarantee lenders that the borrower will repay everything.
Examples of Loans that Can Have Liens:
- Title Loans
- Real Estate Loans
- Home Loans
- USDA Loans
- Veterans Administration Loans
- Federal Housing Administration Loans
- Home Equity Loans
Contact a title loan agent from LoanMart at 855-422-7412 for questions about how title liens work.
Unsecured Loans Usually Don’t Have Liens
An unsecured loan is fairly self-explanatory. Instead of using collateral to secure funding, an unsecured loan lender will rely on your credit history and your income to determine if you are eligible. There are some cases where you can use collateral to apply for a personal loan, but it is not common. Since there is no collateral to safeguard the lending risk, the interest rates for unsecured loans are generally high if you do not have a great credit score.
Also, the loan terms and amount of money you’d receive could be shorter and less than what you might receive through secured loans.
Here are some examples of unsecured loans:
- Payday Loans
- Personal Loans
- Medical Debt
- Credit Cards
- Student Loans
Apply for the Funding You Need Today
Perhaps it’s time to start on your title loan inquiry! Take advantage of a convenient and flexible approval process to get your funds in no time!1, 3 It only takes three simple steps to find out if you can get your money as soon as the next business day1, 3:
1. Start Your Inquiry
You can choose to initiate the inquiry process from one of two methods: doing the loan process online or speaking with a title loan representative over the phone at 855-422-7412. Remember, title loan agents are available six days a week for extended hours to help in any way they can.
2. Submit Required Documents
Title loan agents will ask you to submit documents as part of the approval process. Although it may sound daunting, you might only have to look around your house to find them all! Once you have them on hand, you could quickly deliver them through an email or fax.3 Here’s what you need to send:
- The Title to Your Vehicle
- Proof of Income
- Proof of Government-Issued Photo Identification
- Proof of Address
- Recent Pictures of Your Car
3. Collect Your Money!1
If you’re approved for a car title loan, you can choose between a few different ways to get your funds! You can choose between a direct deposit or a check sent to your house!
Find out if you qualify for title loans by inquiring about one serviced by LoanMart! Simply get through a quick loan application that you can complete within minutes!1, 3 Contact a title loan representative from LoanMart at 855-422-7412 for more information!