If you've been looking at getting a car title loan, you've probably come across the term "lien-free title". However, you may not know what this is or why it's required in order to get a car title loan or a car registration loan. It is important you have this in line so you can decide which loan you need and what you need to get it. If you’re asking “What is a lien free title?” then you’ve come to the right place.  A lien is a financial claim that a lender places on your collateral until the entire loan is repaid. Read further on our guide to learn more about your title and what loans we offer at Fast Auto Loans, Inc. to help you out.

Learn About Your Lien-Free Title With These Questions

What Is A Lien-Free Title?

A lien is what a financial lender places on your collateral until you are able to repay the loan back entirely. In other words, a lien is about having debt placed against your car’s title. This lien means your title is not lien-free; in other words, you are still making payments on your vehicle and don’t fully own it just yet. This lien secures certain loans – like a car title loan. Once the lien is taken off the title, you can go about using the vehicle however you’d like – like if you wanted to sell it.

What Is The Purpose Of A Title?

Now that you know what a lien-free title is, you need to know what the purpose of the title even is. A car title is a legal document that denotes the official owner of a car. If you bought a car from anyone or any dealership, you should have also received a title for that car. It's an absolutely mandatory document, and naturally, crucial for certain types of loans – especially if you plan to use it as collateral.

However, even if you drive a car, you may not have a title for it in your name. For instance, if you are still paying off a car you bought from a dealership, the title might officially be in the dealer's name, not yours. And if you buy your car from an individual and they can’t – or won’t – give you the title, this is a big red flag that something is wrong and you should immediately turn away from the deal.

How Do I Know If I Have A Lien-Free Title?

Your title is lien-free if there are no debts against it or you’ve just paid off the debts against it and the lender has removed them. So, if you are not paying any sort of debt related to your car, it's probably lien-free. This means that the car is not being used as collateral for any type of loan nor are you still paying it off.

It's important to also keep in mind that the vehicle must be owned by you, legally. Say, for instance, that a family member had a fully paid-off car with no debts against it. You personally could not put up that car title as collateral, because you are not the legal owner of that car. The family member that is the legal owner would have to apply for the loan. The car must be legally owned by you, and the title must have no debts against it. Both of these must be true if you want to apply for a title loan.

What Loan Do I Need A Title For?

By now you must have noticed that when you talk about a lien-free title, you are also talking about a title loan. The only way to get a car title loan is if you have a lien-free title. Now, when it comes to a car registration loan, you don’t have to have a lien-free title. This is because we are using your car’s registration as collateral instead of the car’s title. So if you were still making payments on your vehicle or your title was not lien-free, you can apply for this loan instead.

For either of our loans, the process begins when you fill out the online form. Make sure you check specifically which loan you want. From there, one of our loan representatives from the nearest Arizona car loan location will contact you. They will set an appointment for you to either come in or meet them somewhere else to continue the process for either loan. If you are approved for either loan, you could get the money on the same day or the next.

Make Sure Your Title Is Lien-Free Today

As this guide shows, it is important you understand your vehicle title and that you know how to determine if it is lien-free. Besides getting a loan, it is important you have a lien-free title for various reasons. So make sure you take a look at your title and find out where you stand. And if it is lien-free and you need a loan, fill out the online form for a car title loan. If it isn’t, consider getting a car registration loan instead. 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.