a bag filled with money is balanced on a seesaw with a small car to signify a vehicle title loan

What Is A Lien-Free Title?

If you’re considering getting a vehicle title loan, you may have heard the term lien-free.  A lien-free title is a car title with no outstanding liens or judgments against it. In other words, no party has a legal claim against the title of your car.

There’s a lot to understand about getting a lien-free title so that you can get a title loan. This article will walk you through what a lien-free title is, why it’s important, and how to get a vehicle title loan.

What Is A Lien-Free Title?

What Is A Lien?

A lien is a legal claim against an asset, and it is typically used as collateral for a debt. A lender can put a lien on an asset if a borrower's debt has not been paid or their obligation has not been met.

A legal verdict could also put a lien on an asset under certain circumstances. One such possibility occurs if someone hasn’t paid their federal income taxes. The Internal Revenue Service (IRS) can put a lien against that individual’s property, making selling and refinancing more difficult.

Liens can be put on a car if the individual hasn’t met their regular payments as agreed when purchasing a vehicle. Liens may also be placed on a car if a title loan hasn’t been repaid according to the agreed terms.

What Does A Lien-Free Car Title Mean?

A lien-free vehicle means no one has a legal claim against your car. If you’ve stayed on top of all your car payments after you bought the vehicle and have not used it as collateral for anything you defaulted on, it’s highly unlikely that your car has a lien.

Most often, lenders will not offer you a title loan if your car has a lien, which is why having a lien-free car title is so important.

two toy cars climb a hill of coins to represent receiving a vehicle title loan after applying with a lien-free title

Why Does A Lien-Free Car Title Matter?

When you think about it from the lender's perspective, the vehicle is intended to be used as collateral for a loan, offering less risk for the lender and creating a relationship of trust. When there is a lien against the car’s title, the car's value is diminished such that it doesn’t serve its purpose as valuable collateral to ensure the loan will be repaid.

A car title with a lien on it is a severe risk to lenders, which is why lenders rarely offer a vehicle title loan if the car’s title has a lien against its value.

How To Remove A Lien From Your Car

In most cases, you’ll be aware of a lien on your car, and the process for removing it is straightforward.

Here's how you accomplish this goal: 

  • If you have any outstanding debts, pay back the lender, city, or state putting the lien on your vehicle, and they will usually remove the lien for you. 
  • Once you’ve removed your lien, you’ll need to have the lienholder remove their name from the title by asking the state DMV to do so.
  • Apply for a duplicate title from your state’s official DMV website, include the lien release form, and attach the original title with the lien. If there’s a court order to remove the lien, send that to the DMV, as well.
  • You’ll need to pay a fee to duplicate your car title, so make sure to pay and attach any appropriate fees depending on whether you’re copying the title in person or by mail.

a black woman and a Hispanic couple shake hands after qualifying for a vehicle title loan

How To Use Your Lien-Free Car Title

Borrowing using your car title is an excellent option to handle major emergencies. If you’ve got a lien-free title, New Mexico Title Loans, Inc. can help you qualify for a vehicle title loan of up to $10,000.

To apply, you'll need the following:

  • Driver’s License or State Issued I.D.
  • Lien-Free Title to Your Vehicle
  • Your Vehicle for Inspection

The in-person process can take as little as 30 minutes, and if you’re approved, you can get the fast cash you need on the same day or the following business day.

Submit An Inquiry Today!

Once you receive a lien-free title, you can use it as collateral for a title loan to handle unexpected emergencies. Sometimes, life happens, leaving you feeling hopeless with massive bills to pay. A vehicle title loan from New Mexico Title Loans, Inc. can help you handle those major expenses without the hassle of traditional loans.

If you believe a vehicle title loan is right for you, fill out our online form, give us a call, or visit the New Mexico Title Loans, Inc. in your area today. 

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

Emma Frost

Emma Frost is a lifestyle and finance blogger with a talent for communication and a passion for financial literacy. She uses her writing talents to explore topics that help her readers gain financial stability and growth.

New Mexico Title Loans

If you are searching for a convenient way to get a title loan, look no further than New Mexico Title Loans, Inc. We offer online title loans where not store visit is required or in-store title loans and installment loans. To get started, fill out the simple online form above or give us a call at any one of our convenient store locations.

All you need is the following items:

  • Driver’s License or State Issued I.D.
  • Lien-Free Title to Your Vehicle
  • Your Vehicle for Inspection

When you’re ready to get the emergency cash you need without all the hassles of a traditional loan, New Mexico Title Loans, Inc. has you covered with a car title loan up to $10,000 today.

New Mexico Title Loans