How to Clear a Car Title After the Loan Is Paid

Car loans make it easier to purchase an automobile. Financial institutions offer a wide variety of loan terms, depending upon your circumstances. When you get a car loan, the automobile is used as security against the loan. The bank places a lien on the car title to secure its interest in the property. You can't sell the vehicle while the lien is on the title. When you pay off the loan, you need to get a clear title for your car.

Instructions

1

Pay off your car loan. Look at your last loan statement or contact the lending institution to determine the final payoff amount. Make sure your loan is paid in full.

2

Contact the financial institution that granted you the car loan and request a written lien release proving that you paid the loan in full. The lender will send you a letter stating that you have satisfied your financial obligations and that it is releasing the lien on your car title.

3

Take your car title and the lien release form to a local office of the Motor Vehicle Department, or MVD. Submit your title and the lien release form, and request a new title. Pay the fee. The MVD will issue you a new car title that is free and clear of the lien.