If you borrowed money to purchase your car, the lender will be listed as a lienholder and retain the title. Paying the loan in full allows you to remove the lienholder, but the amount of time it takes to receive the clean title will vary. The specific timeframe depends on how the lender carried the title and the amount of legwork you are willing to do.
The Electronic Lien and Title System
As of 2015, 21 states participate in the Electronic Lien and Title system, which facilitates the paperless exchange of information between lienholders and the DMV in the state where the vehicle is registered. One advantage of electronic titles is that they are processed faster than paper certificates. The lender usually will transmit a release of the lien to the DMV after confirming that the check has cleared and the remaining balance of the loan has been paid. If the DMV is within driving distance, you may be able to make arrangements to pick up the new title at their office within a few days of making the payment on the loan. Otherwise, the DMV will mail it to you, which may take a week or two to arrive.
Processing Paper Titles
If the lienholder is not enrolled in the ELT system, the title will be held as a paper certificate. Once the loan on the vehicle has been paid in full, the lender will have to pull the title out of storage, have an officer sign off as the lienholder, and mail the certificate of title to you. Lenders tend to estimate that this process can take 5 to 10 business days but it can take longer. When you receive the title from the lender, it will have been signed off, but only the DMV can remove the lienholder and print a new certificate. You can take the paperwork from the lender to the nearest DMV office and have the title changed while you wait, or you can submit it by mail. Sending it by mail may take two weeks to get the new title.
Paying off the Loan at the Lender’s Office
If the lienholder has an office in your area, consider making an appointment to pay the balance due on the loan in cash. After confirming that all fees, principal and interest have been paid, the bank can release the lien on the title, which you must then present at the DMV to have the lienholder removed. If you have an appointment at the DMV or the lines are short enough after picking up the title at the lender’s office, you may be able to get the new title the same day you pay off the loan.
Steps that Can Speed up the Process
Considering that some new car loans extend out to 84 months, you may have changed addresses since buying the car. To ensure prompt delivery of the title, confirm that your current address is the one on file with the DMV and the lienholder. If time is of the essence, a second step that can save a few days is to wire the final payment instead of sending a personal check. This will likely require a fee to do the wire transfer, but it will avoid having the lender put a hold on a check until it clears.
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