What is a Title Loan with a Lien?

A title loan is a secured loan, where the borrower will pledge their qualifying car’s title as collateral for emergency funding. In order to use your car’s title as collateral for the loan, a title lender will need to add a lien after you have signed your loan agreement. Getting a title loan with a lien on your car is possible, and there are two common reasons why you might already have a lien present on your car’s title. For example, a lien is added to your car’s title as soon as you get a loan from an auto lender or another financial institution to finance the purchase of a vehicle.

Similarly, if you already have an existing title loan on your vehicle, then the title lender likely placed a lien to your car’s title after the loan is complete. Whether you are financing your vehicle or currently have a title loan, you do not have a clear title. A clear title means that it is free of any liens and is owned entirely by you, so other creditors cannot claim ownership.

Keep reading to understand more about liens, collateral, and how to secure funding without a clear title.1

Difference Between a Lien and Collateral

title loan with lien

Before you can pursue a title loan with a lien, it’s important to have a solid understanding of the terms “lien” and “collateral,” as they play an important role in title loan applications.

Collateral refers to an asset that is pledged to guarantee a loan, and it protects the financial interests of a lender or financial institution. With a title loan, the collateral for the loan is the title to your qualifying vehicle.

If you use a vehicle as collateral for a loan, the lien on your car’s title is the lender’s legal right to your asset until the loan is paid off in its entirety. Upon receiving final approval for a title loan and signing your loan agreement, a car title lender will add a lien to your car’s title as soon as the loan is funded. Once you have made the final payment on your loan, your lender will release the lien. While you are making payments on your loan, it is possible to maintain access to your asset and keep driving your vehicle like it’s business as usual.

Can You Get a Title Loan with a Lien on a Car?

title loan with lien holder

As mentioned above, getting a title loan with a lien on a car title is an option in some instances. Some lenders offer second lien title loans, but in order to secure this financing option, your first lienholder will need to allow the second lienholder to add an additional lien to your car’s title. Many lenders do not offer this option due to state restrictions and other complications that come with adding a second lien, so finding a lender willing to work with you can be difficult. Instead, another option to pursue is refinancing your current title loan. Essentially, refinancing your title loan means replacing your existing loan with a new one in order to obtain different loan terms. When refinancing a title loan, your interest rate, repayment period, and monthly payment can change, so it is important to make sure that your new loan can offer more optimal terms before you sign on the dotted line.

If your vehicle has enough positive equity and you are able to meet the lender’s requirements for funding, you have the option to apply for a car title loan on a financed vehicle. Your vehicle will have positive equity if its resale value currently exceeds the amount you owe on your auto loan. If you have any questions about refinancing your existing title loan or applying for a vehicle-secured loan with a financed car, call 855-422-7402 to speak with a ChoiceCash title loan officer!1

How to Increase Your Chances of Approval for a Title Loan With a Lien

Whether you have an auto loan or an existing title loan, in order to increase your odds of receiving title loan approval, you need to keep your current account in good standing. An account in good standing means you are currently up to date with your payments. If your loan is not in good standing, you will not be able to refinance your car title loan or apply for a title loan on a financed car.1

How to Get a Title Loan with a Lien

Whether you are applying for a title loan with a lien on your car’s title from an existing title lender or an auto lender, the process is simple and straightforward. Here’s what you can expect when applying for a ChoiceCash title loan with a lien:1

  1. Fill Out a Questionnaire or Call: Get started by completing a short questionnaire online, or by calling a loan officer at 855-422-7402 to find out if you qualify for immediate pre-approval.1
  2. Submit Your Documents: The documents you will need to complete your application can change depending on whether you are refinancing your title loan or applying for a title loan on a financed car. Upon initial approval, however, you will typically need to have a car title, proof of income and address, recent pictures of your vehicle, and a valid, government-issued photo ID card.1
  3. Sign Your Agreement: If you qualify for a title loan on a financed car or title loan refinancing, the last step is to sign your loan agreement! During this step, you can discuss your loan terms with your loan officer and ask any questions you may have about the repayment process.1

If you’re ready to get started, complete the prequalification form now, or feel free to call our toll-free number to learn more about applying for a car title loan with a lien on your car!1

Jessica R.
Jessica R.
In 2013, Jessica R. graduated from Illinois Wesleyan University and received a Bachelor of Arts Degree in both French and English. In her ten years as an educator and content writer, she has gained a great deal of experience and expertise. As a valued member of the ChoiceCash content team, Jessica is responsible for creating educational and engaging financial content that tackles various topics, including budgeting, secured loans, and more.