How to Sell a Car with a Title Loan

Car title loans are a quick and temporary financial solution during an emergency. When banks turn borrowers with poor credit scores down, lending institutions create favorable conditions to receive quick cash and pay back at a later date. 

With the added convenience of handling the process from the comfort of your home, title loans offer a lifeline to people facing urgent financial needs without the hassle of traditional and time-consuming lending processes. 

However, there can be a situation where you need to sell your vehicle when its title is transferred to a lender. With a lien on your car, unfortunately, you won’t be able to legally transfer the title to the buyer before all debts are paid off. 

Is there any other way in which you can sell a car with a title loan on it? There are a few alternatives that we will discuss in this blog. 

Key Highlights 

  • Selling a car with a title loan is not possible until the lender has temporary legal ownership of your vehicle title.
  • If you are unable to keep up with monthly payments, there is a risk your lender will repossess your vehicle and sell it to cover the debt. 
  • Transferring the title or the title loan to another person while you are still paying off the loan is not possible. 
  • Occasionally, title pawns will buy out your title loan but will instead temporarily take away your vehicle until you repay the debt. 
  • Refinancing a title loan is a common practice of changing a lender that offers better terms and conditions. 
  • If you manage to find a buyer who is willing to pay in advance and receive the right to the car title later, you can use the money to pay your debt in full. 

Can I Sell My Car with a Title Loan on It?

When applying for a vehicle title loan, one of the fundamental requirements involves using your car as collateral. Despite you retaining the right to drive the car after taking out the loan, the title of your vehicle temporarily belongs to the lender. 

Because of this, selling your car with a title loan on it will not be possible until the debt is paid off. As long as your lender holds the right to your vehicle, a potential buyer cannot legally own it. Hence, the lien will not be released up to the point when the loan term is fully covered. 

Can I Transfer My Title Loan to Another Person?

It’s natural to wonder if you can transfer a title loan to another person, such as your partner, family member, friend, or a potential car buyer. The short answer is no. Unfortunately, as a borrower, you cannot sell your vehicle, nor can you ask another person to take over your car title loan.

To retain the rights over your vehicle, you have to pay off the debt first and then do as you please with your car. And if you do decide to post an advertisement about selling your car, make sure to include a note about your current situation. 

Who Buys Cars with Title Loans?

It’s relatively difficult to find a buyer who will be willing to purchase your car, pay for it in advance, and wait for it until you can transfer the title to their name. If that does happen, you’re in luck! In rare cases, potential buyers may agree to cover the remaining debt on your behalf and repossess the vehicle as soon as your title returns to you. 

Title pawns are another option to consider if you want to win more time by prolonging your loan term. Although most title pawns will favor a vehicle without a lien, some may agree to buy out your title loan. 

Unlike traditional title loan lenders, title pawning not only temporarily takes away your title but also the vehicle itself. The process is similar to pawning any other valuable belonging you own with an option to buy it back later. So, pawning your title should only be a viable option if you are ready to spend a few months without your typical means of transportation. 

The final option you have is to refinance your title loan. Refinancing leads to a number of benefits, including longer loan terms, lower interest, and monthly payments. The process is based on trading your old title loan for a new one on different terms. 

How to Refinance Your Car Title Loan?

Since the possibility of selling your vehicle with a lien is out of the picture, refinancing may be the right choice if you need a better rate and a longer loan term. 

Titielo can help you refinance your loan with minimum requirements. Apply online and provide us with the following documents, and we will help you connect with a trusted lender: 

  • Authorization to pay off the loan
  • Government-issued ID
  • Proof of residence 
  • Vehicle title 
  • Proof of income 

If your refinancing application is declined, we suggest reviewing the specific qualifications that were not met. Our lenders will provide you with a reason for the rejection. Once you fix the issues with your documents, you can reapply with the same lender and hopefully get approved. 

What to Do If I Cannot Afford Your Title Loan?

If you have taken out a loan amount that you cannot afford to pay off, there are two solutions you can try, one of which you may not be happy with. The downside of a title loan is that a lender can repossess your vehicle if you default. On the other hand, if you are unable to keep up with monthly payments, giving up your car may be a way to free yourself from debt. 

Your second solution is to try to refinance your car title loan with a better lender. It may happen that when you were signing a contract with your current lending institution, you may have been offered a higher-than-usual interest rate. This means that refinancing your loan will help lower your financial scrutiny and provide you with better terms.

Connect with Trusted Lenders at Titlelo – Apply Now! 

How Can I Remove Lien from My Vehicle in Order to Sell It?

The best way to remove the lien from your car in order to sell is to pay off your debt. Title loans are easy loans to qualify for – however, you should be aware of the consequences that may occur if you stop paying for your debt. 

Despite this, it is always better to cover the debt before you decide to sell your vehicle. The reason behind it is that you will not be risking getting into another debt if your car will indeed be repossessed. 

Once your car’s lien is released, you won’t face any obstacles in selling your car to a private person or car dealership. 

Can I Sell My Vehicle to Pay Off My Car Title Loan?

Yes, it is possible to sell your car and use the money to pay your loan in full. However, you will need to find a buyer who will trust you enough and be willing to pay for the car in advance and receive the title later. Although the buyer will be able to drive the car, technically, it will not be theirs until the rights to the titles are transferred. 

Since you cannot transfer the title immediately, nor can you ask anyone to rewrite the loan contract in their name, things may get slightly complicated. If your intent is to sell the car to cover the debt, this plan can actually work, but it will take time. 

We suggest discussing this option with your lender to confirm that this option is viable for you and doesn’t break any agreements stated in the contract. 

Final Words 

If you’ve been wondering how to sell a car with a title loan, we hope this article helped you find the answers. Despite vehicle title loans requiring minimum qualifications and offering quick approvals, this loan places certain restrictions when it comes to selling your car or motorcycle. 

Nevertheless, title loans are commonly a viable option to get quick cash during an unexpected emergency. 

The best way to approach the issues is to find the funds to pay the loan in full and regain the title ownership. If that’s not possible, before you consider giving up on your vehicle, you should try refinancing the loan. If that doesn’t work, you may find luck in finding a buyer who will be interested in covering the balance of your debt in exchange for your vehicle. 

Looking for trusted lenders to apply for or refinance a title loan? Titlelo can connect you with the right lender! We partner with lenders who offer transparent pricing, great customer service, and clear terms and conditions. 

Apply today for a title loan and navigate through financial challenges with ease!