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Don’t Let a Lien Hold You Back: Steps to Clearing the Title on Your Vehicle

  • 5 min read

Buying a car is an exciting moment in life. Whether it’s a brand-new vehicle or a used one, the process of financing it and making payments can be a significant commitment. But what happens when you finally finish paying off your car loan? In theory, the lender, also known as the lien holder, should mail you the title as proof of ownership. However, there are crucial factors to consider when dealing with the title and the lien release process. Let’s explore these aspects to ensure a smooth transition from loan completion to clear ownership.

The Lien Holder’s Role

Throughout the duration of your loan, the lien holder retains possession of the car’s title. This precaution ensures that you can’t sell the vehicle or abscond with it while still owing money. However, when you make the final payment, the lien holder is obliged to send you the title, signifying that you have fulfilled your financial obligations.

The Issue with Titles and Liens

Here’s the catch—when you receive the title, it will still display the lien from the bank that financed your car, such as JPMorgan Chase or U.S Bank. While the lien holder will endorse the title as “paid,” the lien information will remain on the document. Additionally, the lien will also be recorded with the Department of Motor Vehicles (DMV), the governing body responsible for issuing titles in your state. This means that the DMV will still have the lien on record in their system.

Now, imagine a scenario where you misplace the title certificate, or it never arrives in the mail. Naturally, you would approach the DMV to request a replacement title. However, as far as the DMV is concerned, a lien still exists on record. Even if you know that the loan is paid and the bank acknowledges it, the DMV cannot release the title without written verification from the lien holder.

The Verification Process

To obtain the necessary verification, you need a specific document—a lien release—from the bank or lien holder. This document must be in writing and require a signature and notarization to confirm that the loan has been fully paid off. However, contacting the bank to obtain this document can be a daunting task. Banks are notorious for being unresponsive to phone calls, emails, or even visits to local branches. The employees you encounter often lack the authority to handle lien releases and must coordinate with the main office, resulting in delays and frustrations.

A Different Approach

To navigate this challenge effectively, we recommend taking matters into your own hands. Instead of relying solely on the bank, you can procure the lien release documents directly from the DMV in your state or access them through a reliable source like our website. These documents can be obtained for free. Once you have the necessary forms, fill them out completely, including essential details such as the year, make, VIN number, and your personal information. However, note that you cannot sign on behalf of the bank or indicate that the loan is paid. The bank or lien holder must perform this step.

To increase your chances of obtaining the lien release promptly, mail the completed document to the bank using traditional mail services. Avoid using email, text messages, or any digital means of communication. Along with the document, include a polite note requesting the bank to sign the form and return it to you. Make the process even more convenient for the bank by including a stamped return envelope. This approach demonstrates your commitment and may encourage the bank to prioritize the lien release.

Why Going Direct Works

By adopting this proactive approach, you take control of the lien release process. Waiting for the bank to handle the request through conventional communication channels is often futile. Many banks lack a dedicated lien release department, and employees are occupied with various tasks, making it challenging to receive a prompt response. By obtaining the lien release documents directly from the DMV or through a reliable source, you increase your chances of success. Surprisingly, this method has proven effective even for vehicles with outstanding balances or charge-offs. Agents processing the lien release documents often overlook these details, assuming that the lien has been cleared since you provided the necessary paperwork.

When it comes to obtaining a lien release for your car, proactive measures yield better results than relying solely on the bank’s responsiveness. While the lender should mail you the title once you’ve completed your car loan payments, it will still display the lien information. To ensure a smooth transition to clear ownership, it’s essential to have the lien release document. By obtaining the necessary forms from the DMV or a trusted source and mailing them to the bank, you take control of the process and increase the likelihood of a successful lien release.

Remember, communication with the bank through traditional means can be frustrating. Don’t let this obstacle prevent you from gaining ownership rights to your vehicle. By taking charge of the process, you can expedite the lien release and enjoy the peace of mind that comes with full ownership of your car.