Can You Get a Title Loan on a Financed Car?

Many people rely on their vehicles to get to work, pick up kids, or handle everyday errands. But when an emergency expense hits — and you’re still paying off your car — you might wonder: Can I use it to get a title loan?

And to that, we say, yes, but it depends on your equity. 

Even if you’re still making payments on your car loan, you may qualify for a title loan if the vehicle is worth significantly more than what you owe. Understanding how equity works  (and how lenders view financed cars) can help you decide if a title loan is a smart option.

At Titlelo, we help borrowers explore their options and connect with lenders who work with financed vehicles. Here’s what you need to know.

Quick Takeaways

• You can get a title loan on a car with an existing loan if you have positive equity.
• Most lenders want at least 25–50% equity in the vehicle.
• Your title may need to be transferred or worked out with your current lender.
• If a title loan isn’t possible, there are fast alternatives to consider.
• Titlelo helps match you with lenders who consider financed cars.

Understanding Vehicle Equity

Equity is the difference between your car’s current market value and the remaining balance on your car loan.

Formula:

Equity = Vehicle Value – Loan Balance

For example, if your car is worth $10,000 and you still owe $3,000, your equity is $7,000. That’s a strong equity position, and it makes you a good candidate for a title loan.

Why does equity matter?

Lenders use your equity as collateral. If the value of your car can’t cover the loan amount, they’re less likely to take the risk.

Can You Get a Title Loan on a Car You’re Still Paying Off?

You might qualify, but only if you have significant positive equity.

Most lenders prefer the car to be fully paid off, but exceptions are made for newer or high-value vehicles where the borrower has already paid down a large portion of the loan.

For example, if you owe $5,000 on a car worth $15,000, some lenders may approve a title loan on the $10,000 equity.

💡 Tip: Use valuation tools like Kelley Blue Book or Edmunds to estimate your car’s value before applying.

What Lenders Look for in Financed Vehicles

Not every financed vehicle will qualify. Here’s what lenders typically assess:

• Minimum Equity
  Many require at least 25%–50% equity in the vehicle to approve a loan.
• Lienholder Considerations
  If the car isn’t fully paid off, the title likely lists your lienholder, which is the bank or lender who issued your car loan. Title lenders may require them to sign off or allow a second lien.
• Vehicle Condition & Age
  Newer cars in good condition are more likely to be accepted. Older cars with high mileage may not be eligible.
• Market Value
  The higher the resale value of your car, the more leverage you’ll have in the title loan process.

The Title Transfer Process for Financed Cars

A lien is a legal claim by your auto lender on the title until your car is paid off. That complicates, but doesn’t always block, the title loan process.

Here’s what typically happens:

1. Contact the lienholder
   Some lenders will coordinate with your current loan provider to become a secondary lienholder.
2. Payoff first option
   In some cases, you may need to pay off the existing loan before securing a new title loan.
3. Title held by lender
   Until your car is paid off or restructured, the title is not “clear”, meaning it’s not solely in your name, which is a common requirement for many title loans.

Alternatives to Title Loans for Financed Cars

If you don’t have enough equity (or the title complications are too much), consider these alternatives:

🟢 Personal Loan

Unsecured and based on credit score.
Pros: No vehicle involved
Cons: Takes time, often requires good credit

🟠 Credit Cards

Accessible but expensive
Pros: Immediate access
Cons: High interest rates, low limits

🔵 Auto Loan Refinance

You may be able to refinance your current car loan for a cash-out amount
Pros: Lower rates possible
Cons: Slower process, stricter credit checks

🟣 Credit Union Emergency Loans

May offer lower rates and flexible terms
Cons: Requires membership and strong financial standing

Why some still prefer title loans:

• Faster approvals
• Less emphasis on credit score
• You can keep driving your car while repaying the loan

How to Determine Your Car’s Value and Equity

Before applying for any type of loan, know your numbers. Here’s how to estimate your equity:

1. Check vehicle value
   Use trusted tools like:
   • KBB.com
   • Edmunds.com
   • NADA Guides
2. Get a dealership appraisal
   Many used car dealers offer free trade-in quotes.
3. Calculate your loan balance
   Check your lender’s online portal or last statement to get your current payoff amount.
4. Subtract to get equity
   Equity = Car’s value – Remaining loan

How Titlelo Helps with Financed Vehicle Situations

Not all lenders work with financed cars — but Titlelo does.

Here’s how we can support you:

• ✅ Connect you with the right lenders who accept financed cars with strong equity
• 📋 Help calculate your equity and check your eligibility
• 📎 Guide you through the required documents and help explain the title transfer process
• 💡 Offer alternatives if a title loan isn’t possible right now

When to Consider Paying Off Your Car Loan First

In some situations, paying off your current car loan before applying for a title loan makes sense:

• You’re just a few months from full payoff
• You have access to other funds (bonus, savings, personal loan)
• You want to simplify the process and get a better title loan offer

However, this may not work in urgent financial emergencies. Titlelo can help you decide what’s best for your situation.

Risks and Considerations

Before applying for a title loan on a financed car, understand the potential risks:

• Double Loan Burden
  When you already have an auto loan and add a title loan on top, you’ll be juggling two payments at once. This can quickly strain your budget, especially if the repayment schedules overlap. If either loan payment is missed, late fees and additional interest can stack up fast.
• Repossession
  Both your original auto lender and the title loan lender have a legal claim on your vehicle. If you default on either loan, your car could be repossessed. In many cases, the first lienholder (your auto lender) has priority, but either party may have the right to take action depending on the terms. Losing your car not only affects your finances but also your ability to work and manage daily life.
• Loan Term Conflicts
  Many auto loan agreements prohibit taking out additional loans against the same vehicle. Entering into a title loan without your lender’s knowledge could technically violate your auto loan contract. If discovered, it could trigger penalties or even accelerate the repayment schedule on your existing loan.
• Insurance Requirements
  Some lenders will require you to maintain full coverage or add specific protections, such as gap insurance, while the title loan is active. These extra insurance costs can increase your monthly expenses, making the loan more expensive than you anticipated.
• High Interest Rates
  Title loans are typically more expensive than traditional loans. If you’re already paying interest on your auto loan, adding a high-interest title loan can put you in a cycle of debt where the repayment costs outweigh the short-term benefit of fast cash.
• Short Repayment Windows
  Title loans often have short repayment periods — sometimes 30 days or less. If your car is still financed, that means you’ll be repaying both your regular auto loan and the title loan in a very tight timeframe.

Conclusion: Evaluate Your Equity and Explore All Options

Getting a title loan on a financed car is possible, but it hinges on how much equity you have. Understanding your car’s value and your remaining loan balance is key.

If you’re not sure what to do next or want to explore your best options, we can help.

👉 Let Titlelo help you explore your vehicle financing options today.

Apply for a title loan now »

FAQs

How much equity do I need to get a title loan on a financed car?

Most lenders require 25–50% equity in your vehicle to consider a title loan.

Can I get a title loan if I owe more than my car is worth?

It’s unlikely. If your loan balance is higher than your car’s value, you have negative equity, and lenders typically won’t approve the loan.

What happens to my existing car loan if I get a title loan?

You continue making payments as usual. Some lenders may become a second lienholder on the title.

Is it better to refinance my car or get a title loan?

Refinancing may offer lower interest, but it takes longer and usually requires better credit. Title loans are faster and more flexible, but come with higher risk.

Can I use a lease vehicle for a title loan?

No. Since you don’t own the car, lease vehicles cannot be used for title loans.