What is a Car Title Loan with a Lien?
Title loans are a secured loan option. A qualified applicant can access a percentage of the available equity in their car by pledging their car’s title as collateral for the loan. If you qualify for a title loan and sign your loan contract, a lender will place a lien on your car’s title once the loan is complete. A lien is a legal claim that a lender has on an asset until the debt is completely paid off. The title lender will not release the lien from your title until the loan is paid in full, but you will still be able to drive your car throughout the repayment period.
But, you might be wondering, “What is a car title loan with a lien”? A car title loan with a lien refers to a situation where the borrower uses their vehicle as collateral to secure the loan, but there is already an existing lien on the car’s title.
Can You Get a Title Loan with a Lien on a Car?
In some cases, yes, it is possible to get a title loan with a lien on your car title. A lien on your vehicle’s title may have been placed by an auto lender if you are financing it. Or, it could have been placed by a title lender if you took out a title loan. If you have a lien on the title of your car, then you do not have a clear title. A lien will affect the ownership of a vehicle until the lien is released by the lienholder.
Some title loan lenders can offer second lien title loans to qualified applicants. In most cases, to get a second lien title loan, your first lienholder must grant the second lienholder permission to place a second lien on the title. However, the first lienholder may not allow a second lien to be placed on the title. Many lenders do not offer second lien title loans online, which is not surprising because the process can be quite difficult and complex. However, if you’re currently financing your car, it is possible to get a title loan serviced by LoanMart if you have enough positive equity in your vehicle and can meet the right requirements.1
If you have questions about car title loans with liens, you can contact a title loan agent at 855-422-7412. They are available six days a week for extended hours to take your call and answer any questions you may have!
What is the Difference Between a Lien and Collateral?
The terms “lien” and “collateral” cannot be used interchangeably. Take a look at the differences between them:
- A Lien: A lien is placed on an asset by a lender or creditor. The lienholder has a legal right to the asset until the debt obligation is completely paid off.
- Collateral: The term collateral refers to the asset that a borrower will pledge to guarantee the loan or financial obligation.
To obtain a car title loan, you will be required to pledge the title to your car or truck as collateral in order to secure the loan. It’s important to understand the terms of your loan agreement before you sign your loan. Once you sign your loan contract and the loan is funded, a lien will be added to your car’s title, and the lender will become your lienholder.
If you default on the loan, the lender has the legal right to repossess your collateral and sell it at auction to satisfy the remainder of your debt obligation. You will be able to drive your car throughout the repayment period as long as you keep up with your payments.
How Can I Get a Title Loan with a Lien?
Looking to get a title loan with a lien? If you have an existing title loan, you can try to refinance your current title loan, or apply for a second lien title loan. Depending on the route that you choose, you may be required to submit different documents to complete the application process and find out if you are qualified.
If you are currently financing your vehicle and have a lien on the title from an auto lender, you will typically be required to complete a payoff authorization form during the title loan application process. The title lender will pay off your existing lender, and the remainder that you owe on your auto loan will be added to the total amount that you owe on your new loan with the title lender.
Can I Get a Title Loan with a Lien Online?
Yes, you can apply for a title loan with a lien online! Typically, it can be tough (but not impossible) to apply for second lien title loans online because not many lenders are able to offer them. However, if you want to refinance your current title loan or apply for a title loan on a financed vehicle, you have options! Call LoanMart at 855-422-7412 to learn more about title loan refinancing or title loans on financed cars.1