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How to obtain your car title after loan payoff

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Once you’ve made the final payment on an auto loan, you’ll need to get the title from your lender in order to prove that you legally own the car. This title is also a critical document if you end up selling your car down the line. However, the process of obtaining a car title varies by state.

What is a car title lien?

An auto lien is a note showing that your vehicle is legally owned by another party, in many cases your auto loan lender. In a lot of ways, a lien on your car is similar to a property lien on your home. With a lien in place, the lender has rights to the home (or your car) until you satisfy your loan in its entirety by paying off every dollar you borrowed, plus taxes and fees.

Once your loan is fully paid, the lien on your car title is lifted, and the title can be released to you. At this point, the legal ownership of the car transfers to you from your lender.

How to get your title after paying off your car loan

Once you pay off your auto loan, the lien holder who serviced your loan is required to notify your state’s Department of Monitor Vehicles, or DMV. They can do so electronically or by submitting specific state-required paperwork, but either way, they will let your auto loan servicer know that you no longer carry a balance on your loan.

“After you’ve paid off your auto loan, you’ll have a ‘free and clear’ vehicle title, meaning you now fully own your car,” says Julie Shinn, vice president of lender management at RateGenius. “Anytime there are ownership changes, you have to update the title.”

Does the process differ by state?

The process involved in getting the title to your paid-off car varies dramatically by state, with some states taking care of it entirely and others requiring you to do some grunt work.

According to Shinn, in states that require you to do some filing to get your title, your financial institution will send you a lien release and formal documentation that the loan is paid in full. From there, you’ll take those documents to your state DMV to get an updated title solely in your name.

In other states, once the motor vehicles department is notified, they will automatically mail you the title to your car with nothing required on your part.

To learn the process in your state, visit your state’s motor vehicles website.

How long will it take to get my title after loan payoff?

Shinn says that in states where you have to file paperwork to get a new car title in your name, you can expect to receive your new title anywhere from two to six weeks after submitting the paperwork, but every state’s processing times are different.

Nishank Khanna, a CFO at Clarify Capital, says that states with DMVs that mail out auto titles automatically may take less time, usually around 15 to 30 days. However, processing and mail time can drag things out, so be sure to follow up with a call if you feel like it’s been too long and you should have had your car title by now.

Final considerations about liens

While it’s normal to have a lien on your vehicle, there are some key details to remember. For example, a lien on your vehicle may prevent you from selling it, or at least make the sale significantly harder, says Brian DeChesare of Mergers and Inquisitions.

This is based on the fact that you will have to pay off the car loan and gain access to the title before you can sell your car and transfer the title to someone else. You may not have the funds to pay off your car before the sale, and if you happen to owe more than your car is actually worth, you’ll have to eat the difference.

DeChesare also says that the opposite is true as well: You cannot receive the title for a car when you’re buying from someone with a lien until they pay off the car. This makes buying a car from someone with an auto lien a tricky ordeal. However, some DMV websites have a lien search feature where you can find out who has the title for the vehicle.

As a result of these challenges, many drivers just trade in cars with a lien to their dealership when they upgrade. When you trade in your car at a dealership, you’ll be offered a trade-in value for your car that is hopefully more than you owe. The dealership will take care of transferring the title to its name so it can sell your car to someone else, taking you entirely out of the equation.

The bottom line

If you’re looking to get your car title after paying off your auto loan, you may need to do nothing more than sit back and wait. However, in some states, a trip to the DMV may be in your future.

Either way, you should be proud that you paid off your auto loan and you own your car free and clear. You may be tempted to run out and upgrade to a new vehicle, but it’s smart to think about it and let your savings accrue for a few months first. You may find that not having a car payment can help you save more for retirement or other goals and that driving an older, paid-off car is well worth it.

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Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more.
Edited by
Student loans editor