If you have a lien on your vehicle title that is old or is from the previous owner, you’ll want to get the lien released from the lender. When a lien is too old, or wasn’t yours, to begin with, the lender will not provide a lien release letter because the lien might not be paid off. Instead, you’ll want to send the lender a letter of non-interest.
What is a letter of non-interest?
A letter of non-interest is used by a lender to inform you that they no longer hold any security interest in your vehicle. A letter of non-interest is typically used when a traditional lien release letter is not applicable.
When is a letter of non-interest appropriate?
There are a variety of reasons why a lender may no longer have a security interest in your vehicle, those reasons may be:
- The lien is more than 10 years old
- The loan amount is more than the vehicle’s value
- You were not the original borrower (the loan is not yours)
- The lender is no longer in business and has transferred the lien to another company
- The lender is unable to locate the loan or lien records
Should I request a letter of non-interest in addition to a lien release letter?
Ideally, when requesting a lien release from your lender, you should also request a letter of non-interest. If the lender was bought out and the new company is not able to access your specific records to give you a lien release, they may not get it back to you. When requesting a lien release, always send or request a letter of non-interest just in case.
When it comes to a lien release, a letter of non-interest from your lender is typically sufficient for the DMV to remove the lien from your title.