What To Do When You Pay Off Your Car Title Loan

Car title loans are becoming more prevalent as borrowers find that traditional methods of borrowing money have become more restrictive. Banks and other financial institutions have made lending more difficult for the average person. Any individual with a car, truck, or SUV can borrow against its title. Obtaining a car title loan is relatively easy, but knowing what to do after you’ve paid it off is another matter entirely.

The Basics of Car Title Loans

A car title loan is a secured loan where a vehicle serves as collateral. The lender places a lien on the vehicle’s title, and if the borrower fails to repay the loan, the lender has the right to repossess the vehicle. Car title loans are easy to obtain if you own a newer model vehicle in good condition. Title loan companies generally prefer borrowers who own their vehicles outright, though it’s still possible to get a loan with a small remaining balance.

Once you apply, you’ll need to:

• Prove your identity
• Show proof of residency
• Provide the vehicle title

The vehicle will then be appraised for its value, and the final loan documents will be prepared. No credit checks or background checks are required, approval is based on your vehicle’s value, not your credit history. However, if the loan is not repaid, the vehicle can be repossessed and sold.

Recovering Your Title

At Embassy Loans of Florida, most title loans are processed within an hour,  they’re quick and easy to obtain. Since most title loans are short-term, there are a few key steps to follow once you’ve fully repaid your loan. Most car title loans are structured to be paid off within 12 months. If they aren’t paid in full within that period, borrowers can roll over the loan, though it’s best to avoid rollovers to prevent paying additional interest.

When the loan is completely paid off, it’s time to recover your vehicle title. During the loan process, the lender places a lien on your title. Once the loan is paid in full, that lien needs to be removed to confirm you are the legal owner of the vehicle. The lender will issue a lien release letter after payment is completed. Borrowers must then contact their state Department of Motor Vehicles (DMV) to acquire a new title. The lien release letter allows you to obtain a title that shows full and clear ownership of your vehicle.

Get Help with Car Title Loans

Paying off your car title loan is a great step toward financial freedom, but make sure you take the right steps to reclaim your title.

Apply online or contact Embassy Loans at 833-839-2274 to learn more about managing or repaying your title loan with confidence.