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Getting a title loan with a lien on your car

How Can You Get a Title Loan With a Lien on Your Car?

Updated on January 16, 2023


Since the early 1990s, title loans increasingly gained popularity and offered a whole new option to get quick cash for people with poor credit. Although not all lenders or states provide title loans, there are states where you can find lenders offering title loans, title loans on a financed car, and even second lien title loans.

Lenders place a lien on the car title in exchange for a loan amount when you get a title loan. Whereas, if you have a financed car or car title loan, there’s already a lien placed on your vehicle. Luckily, you can get a title loan with a lien on your car or a second lien title loan. Let's get to know more about it in this article.

A Title Loan With a Lien and Second Lien Title Loan

First, it’s essential to understand that not all title loans with a lien on the title are second-lien title loans. When you have a lien on your car title, it indicates that you don’t have the physical copy of your vehicle’s title. At CASH 1, you can apply for a title equity loan online, over the phone, or at one of our convenient store locations in Arizona. This is the option for those still making payments on their car and have accumulated positive equity in that car.

If you are not happy with your current title loan lender, you have an option to refinance your title loan with us. By doing this, you can save money on your new loan to meet or beat the interest rate of the old title loan. To get a title loan with a lien from us, you will have to talk to our customer service representative to understand the terms of your existing loan and find a way for you to get the funds you need.

Regarding second lien title loans, these are difficult because you already have a title loan with a remaining balance. There is already the first lienholder, and most often, you need to get permission from the first title loan lender to place a second lien. Yes, it can be as overwhelming as it sounds, and this is why we are here. If you want to know more and be familiar with second lien title loans, you can continue to read further.

What are Second Lien Title Loans?

Before learning about second lien title loans, it’s essential to know what exactly the phrase ‘second lien’ means. A second lien is a loan secured using a property already used as collateral and has a first lien existing in the place. While the rights of both first and second lien holders are pretty much the same, the second lienholder will only be repaid after the first lienholder in case of default by the borrower.

Thus, a second lien title loan means getting a title loan when your car title is not lien-free. Unfortunately, the complexity of having two lienholders on the same car title makes second lien title loans the rarest loan option. Generally, title loans with a lien already on your car are used invariably as second lien title loans.

How Do Second Lien Title Loans Work?

The procedure of getting a second lien title loan is very similar to that of getting a title loan for the first time. Now that you know you may still be able to get a title loan with a pre-existing lien on your car, you would probably want to see how the funds are granted and the basis for deciding whether or not those funds will be given to you.

Although each title loan company that provides a second title loan may have their procedure to approve the funds, a majority of them consider how much they will have to pay to get rid of your existing lien on your vehicle. Next, they will look at how much you want to borrow in addition to that amount. If you can meet the criteria they set to receive a loan of that amount, you will get money equal to the amount in excess after paying off your previous lien to use at your discretion.

How Can I Use a Lien on a Car Title Loan to Get the Cash I Need?

Some lenders offer a title loan with a lien and help you borrow the money you need and pay off your existing title loan. However, we suggest you carefully go through the loan documents before signing. This is to check whether you will be actually receiving the amount you need after the previous title loan is paid off or not. Some lenders also charge fees for early payments on your loan, unlike CASH 1. This could eat away a part of the money that you were expecting to receive.

Here Is An Example Of How You Can Get Title Loans With A Lien:

Let's consider you have $2,000 outstanding on your title loan or car loan and have been approved for another title loan with bad credit for $5,000 with a lien already placed on your vehicle. The lender of title loan with a lien will first use $2,000 out of the approved amount to pay off the lien and become the temporary lienholder on your vehicle’s title. You now owe $5,000 against your vehicle title and get $3,000 to use for whatever you need.

What Do I need to qualify for a title loan with a lien?

The requirements of a title loan with a lien or second lien title loans may vary from state to state and lender to lender. In most cases, you might need the permission of your first lienholder to be able to add a second lienholder to your car’s title.

Assuming that the first lienholder has granted permission, you will have to provide proof of the original lien when applying for a second lien title loan. A valid ID to prove you are 18 years or above is also required. Apart from this, your second lien title loan lender may ask you to provide your basic contact information data like name, address, phone number, and email address.

Just like every title loan requirement, you will have to bring your vehicle for a thorough inspection before you get the loan approval. It is not a lengthy procedure but plays a vital role in deciding whether you qualify for a title loan or not.

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Harita Solanki

Harita Solanki is a passionate advocate for personal finance and believes in empowering individuals to take control of their financial lives.

Her expertise covers a wide range of personal finance topics, including budgeting, saving, credit, debt management, and retirement planning.

With over six years of dedicated experience in the finance industry, Harita has helped countless readers of CASH 1 Loans make informed decisions and achieve their financial goals.

As a dedicated writer, Harita has contributed to numerous financial publications, sharing her knowledge and insights to help readers navigate the complexities of personal finance.

Her writing style is approachable, concise, and tailored to the needs of everyday individuals looking to improve their financial well-being.