What to Do If You Have a Title Loan on a Car You Want to Sell Auto title loans are a great way to secure quick cash, especially for those who need funds without a high credit score. However, circumstances can change, and you may find yourself needing to sell your car while it still […]
What to Do If You Have a Title Loan on a Car You Want to Sell
Auto title loans are a great way to secure quick cash, especially for those who need funds without a high credit score. However, circumstances can change, and you may find yourself needing to sell your car while it still has a title loan attached. The good news is that this is possible, but it requires following the correct steps to transfer ownership while paying off your debt.
If you are facing financial difficulties, you may also want to explore title loan refinancing options before deciding to sell your vehicle.
Is Selling a Car with a Title Loan Possible?
When you take out a title loan, the lender places a lien on your vehicle title, meaning the lender has a legal interest in the car. While this does not prevent you from selling the car, it does require that you settle the outstanding loan balance before ownership can be transferred.
Depending on your state laws and your lender’s policies, you may need to go through additional steps to clear the lien and transfer ownership legally. If you’re unsure of your options, check out how title loans work to better understand the process.
Steps to Selling a Car with Title Loan Debt
1. Determine Your Loan Payoff Amount
Before selling your vehicle, you need to contact your title loan lender to request a loan payoff statement. This statement will show the exact amount owed, including interest and fees. If you can sell your car for more than this amount, the lender will likely approve the sale.
If the sale price is less than the amount owed, you may still proceed, but you will need to pay the remaining balance to release the title. You can also explore title loan buyout options to lower the payoff amount.
2. Sell the Car at a Price That Covers the Loan
If possible, sell the car for more than what you owe on the title loan. This allows you to pay off the lender and keep any remaining balance for yourself.
- If you owe more than the car’s value, you may need to cover the difference out of pocket or negotiate a settlement with your lender.
- If you need a buyer quickly, consider listing your car on classified sites, dealerships, or trade-in programs.
3. Complete the Sale at the Lender’s Office
Most title loan lenders hold the vehicle title until the loan is fully paid. Therefore, the transaction may need to take place at the lender’s location to ensure the lien is removed, and the title is transferred properly.
In some cases, the lender may allow you to use an escrow service or work with a third party to ensure a smooth sale.
Additional Considerations Before Selling Your Vehicle
Refinancing Your Title Loan Instead of Selling
If selling your vehicle isn’t ideal, refinancing your title loan may provide a better solution. Refinancing allows you to:
- Reduce interest rates and lower your monthly payments.
- Extend repayment terms to make payments more manageable.
- Avoid having to sell your vehicle while still resolving financial struggles.
Car Title Loans on Older Vehicles
Many lenders prefer newer vehicles, but some accept older cars if they are in good condition and hold significant value. If your car is paid off, you may qualify for a title loan, even if it is an older model.
However, failure to make payments could lead to repossession. If you have concerns about paying off a title loan, check out title loan repayment strategies for guidance.
What Happens If You Default on a Title Loan?
Failure to repay a title loan could result in repossession. The process typically follows these steps:
- The lender sends a written default notice warning of repossession.
- If the loan remains unpaid, the vehicle is repossessed.
- You may have a limited time to reclaim your car by paying the outstanding balance.
- If unpaid, the vehicle is sold at auction.
- If the sale amount exceeds your loan balance, you may be entitled to receive the remaining funds.
Most lenders prefer avoiding repossession, as auctioning a vehicle does not guarantee repayment. If you are struggling with payments, lenders may offer options to adjust repayment terms.
If you need help understanding title loan laws in your state, check out state title loan regulations to ensure compliance.
Final Thoughts: Selling a Car with Title Loan Debt
Selling a car with a title loan lien requires careful planning, but it is possible if handled correctly. Before selling, make sure to:
- Know your loan payoff amount.
- Sell the car for a price that covers the loan balance.
- Coordinate the sale with your lender to release the title.
If selling is not the best option, title loan refinancing may provide relief.
💰 Get a title loan today!
🚗 Use your car title as collateral and keep driving your vehicle!
📍 Find a title loan location near you.
Visit us at www.bestautotitleloan.com to learn more about title loan repayment options.
