Paying off a car loan is a rewarding experience and can take a big financial weight off your shoulders. However, paying off the loan might not mean that your work is done. You will also have to get a new title for the vehicle that lists you as the sole owner if you want the car to be completely in your name. Most of the time, this requires you to work with the Department of Motor Vehicles and your auto loan lender to get the new title and get on your way. 

When you buy a car using a loan from a financial institution, they will be listed on the title as one of the owners. After you make the final payment, you will want to take the lender off the title and get a new one with your name only. There are a few different processes for getting a new vehicle title and depending on your state, it may be easier or more difficult to do so. Knowing what the process is in your state and what steps you have to take will help you avoid delays in getting your updated title. 

### Why is a Car Title Important?

Every car that is on the road has or has had a title at some point. The title includes information such as the vehicle identification number, vehicle owner, and contact information. It will also list any secondary owners of the car or anyone who can claim ownership. This usually includes institutions like auto loan providers, collection agencies, or shops that have not received payment. These extra owners are called lien holders and if you want to have a vehicle that is completely in your name, you have to clear your balances with any lien holders. 

You will need a vehicle title to do things like register a new car with your state DMV, get auto insurance, refinance, or sell the car. When you buy a car with a vehicle loan at a dealership or for a private sale, the loan provider will have a lien on the title. After you make the last loan payment, you will have to apply for a new title that lists you, the borrower, as the sole owner. Every state and institution has its own set of steps for going through this process and it is important to know what to expect. 

{ad type="m-box-1"}

### How to Get Your Title After Paying Off a Car Loan

After you pay off your loan balance with your bank, dealership, or credit union, you will want to take them off the vehicle title. The process for getting this done will change from state to state and from institution to institution. However, it will almost always take some time and may require some extra work on your end. Understanding what you have to do and what you can expect in terms of a timeframe will help you be ready when the time comes to make your last payment. 

#### Know Your State’s Process

Depending on what state you reside in, the process of getting a new title for your vehicle with yourself as the sole owner will change. The best way to find out what you have to do to get a new paper title is to visit your state’s DMV website. It should have the process laid out for you and let you know what you have to do on your end. In some cases, you may not have to do anything at all and instead, you will just have to wait a few business days for your new title to come in the mail. However, you want to be sure so you don’t end up delaying the process of getting your paperwork. 

No matter where you live and what the steps are for getting a new title, it is a good idea to get a written notice of making your last payment from the lender. You can usually get this either through the mail or electronically. Either way, be sure to hang onto this document as you may need it to make the transfer to yourself as the only owner of the vehicle. 

#### Know Whether You Are in a Title-Holding or Non-Title-Holding State

Depending on whether or not you are in a title-holding or non-title-holding state, the process of getting your new title will be different. In a title-holding state, you will get a title as soon as you purchase a new or used car with a loan. This title will include you as the owner as well as the financial institution that you used to get your loan. With this as your current title, you will hold onto it until you make the final loan payment, and then you will have to apply for a new title. 

In a non-title-holding state, you will not get a title at all until you have paid off your auto loan. The lender will keep the title and send you a new one with their name removed once the loan balance is eliminated. Non-title-holding states make it quite a bit easier to get a new title because the lender will take care of the whole process. However, it can take quite a bit longer to get your new title, so it is important to know whether you live in a title-holding or non-title-holding state so you can know when to expect the process to be finished.  

### What is a Lien on a Title?

The main reason why it is so important to get a new title after paying off a loan is the fact that until you do, your title will have a lien on it. Liens exist so institutions like banks, credit unions, dealerships, and mechanics have some recourse if you don’t pay a balance that you owe. A lien gives the institution partial ownership of the car, which allows them to get what they are owed or repossess the vehicle. If you have paid off your loan, you do not want any liens on the title, so it is important to get them removed and make sure you are the only person who has a claim of ownership of the car. 

### How to Get a Lien Off Your Title 

Once you have made the final payment on your auto loan, you can start the process of getting the lender’s lien off your title. This process should always start with finding your current title and looking to see what institutions are listed as co-owners. This will give you a good place to start and ensure that you have all the necessary paperwork. You should also have things like your insurance policy paperwork, license plate number, and vehicle identification number, all of which may be necessary to get your new title. 

#### Find the Lien Holder

Before you can get a release of lien for your new title, you will have to make sure you know who the lien holder is and how to get in contact with them. Sometimes, lenders and financial institutions will merge or change names over the course of your loan term. If you don’t know the name of the institution that currently holds the lien on your vehicle, check with your local DMV. They will often have lists of lenders that have merged together as well as contact information to help you narrow down your search and get the required paperwork. 

#### Get a Lien Release

A lien release is an incredibly important piece of paperwork when it comes to getting a title put in your name. The release of the lien tells the DMV that you have paid off the loan and that the lender is giving up their ownership of the vehicle. Sometimes, the lender will send you this document automatically and other times you will have to request it. This is why it is so important to know how to get in touch with your lender and find out when you can expect the release. 

#### Notify Your Car Insurance Company

You should always notify your car insurance company when paying off a loan and getting a lien off your vehicle’s title. They will have to update their records and may have to send you new insurance cards. Notifying them will help you know what you have to do and how to keep your insurance policy valid going forward. 

{ad type="m-box-2"}
{ad type="dt-wide-breaker"}

### How to Get Your Title if Your State Uses an Electronic Lien and Title System

In recent years, some states have adopted an electronic title system that streamlines the whole process of taking a lien off your title and getting a new one. The Electronic Lien and Title System, or ELT, is a database that pulls information from credit unions, banks, and dealerships and automatically updates titles as the circumstances change. This streamlines everything and reduces the number of things you have to do to get your new title. 

If your state uses an ELT system, you most likely won’t have to do anything to get your new title. The information will be automatically sent to the DMV and your new title will arrive in the mail. However, the amount of time this will take will depend on your state and the workload they are dealing with at the moment. Be sure to keep this in mind and leave extra time before you start the process of selling a vehicle or transferring its ownership in any way. 

### States That Use the ELT System

__As of October of 2023, 26 states are using the ELT system. These states include:__

- Arizona
- California
- Colorado
- Florida
- Georgia
- Hawaii
- Idaho
- Iowa
- Kansas
- Louisiana
- Maryland
- Massachusetts
- Michigan
- Nebraska
- Nevada
- New York
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- South Dakota
- Texas
- Virginia
- Washington
- West Virginia
- Wisconsin

### Final Thoughts

Paying off your auto loan is an exciting prospect and can be a great way to reduce your financial burden. Before you make the final payment though, it is important to know what you have to do to make everything final. Having a lien on your title can hinder your ability to sell your vehicle or transfer ownership to another person. Understanding the process of getting a new title in your state and taking the lender off that title will help you avoid delays and get the paperwork you need.

How to get the title after paying off car loan: What you need to know when making your last auto loan payment and officially becoming the title holder for your new or used vehicle.

How to Get Your Title After Paying Off Car Loan

Related

Which States Require a Front License Plate?

Buying a Car Without a Title - What to Know

How to Register a Car in Florida