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Do You Need to Pay Off Your Car Before Getting a Title Loan?

Do You Need to Pay Off Your Car Before Getting a Title Loan?

Most cities in the South have a variety of title loan establishments located within their limits. Therefore, finding the right title loan agency when you need alternative funding can be a hassle. It can be even harder to find the right one when you don’t understand the lending process. One of the most common questions that Mid-South title loans gets regarding our title loan lending processes is whether or not your car needs to be paid off before you can get a title loan. The varies depending on the institution, so here is a quick look at the title lending industry and processes behind title lending.

What is a Lien?

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A lien indicates whether your car is paid off. It is a legal term for the right of a person or entity to maintain ownership of an object or property until the debts that are owed on that property are paid off. In terms of car ownership, this most typically happens when a car is obtained through a company, and in-house financing is used to pay off the car. In theory, the car belongs to the person who signed the agreement to purchase it. Their name is on the title, they register the vehicle under their name, and they are responsible for insuring it. However, until the total amount owed on the car is paid to the dealership, the dealership has the right to take the car back.

What is the Lending Process with Mid-South Title Loans Like?

Getting a title loan through Mid-South Title Loans is simple, but does have a few requirements that differ from some competitors. Those interested in getting a title loan through Mid-South Title Loans bring in photo identification to determine age and ownership of the car, fill out an application (which can be done online before you come in for your appointment) and bring in their lien-free title. This means that to receive a title loan through our establishment, your car must be completely paid off. If your car is paid off, we will generally approve your application, give you an estimate on the worth of your vehicle, then you walk out for a loan equal to the value of the car. To receive the title back, you make payments, and once the loan is paid back in full you receive your title back, and the car is legally yours again.

Why Do I Need a Lien-Free Vehicle for a Title Loan?

At Mid-South Title Loans, we only accept cars without a lien for many reasons. First, we want to be sure that you get the full amount against the worth of your vehicle – something that is not possible when lending against a car with a lien on it. We also believe that it is easier for people to pay off a loan when they get the amount that they are expecting back against that loan. Lastly, we want to protect our customer from any legal claims that the entity who has the lien against your car might make. Our highest priority is the satisfaction of our customers, and breaching a sales contract could get you in hotter water than you’d expect.

What are My Options if my Car Does Have a Lien?

In a time of crisis, it can be hard to think about finding funding. It can be even harder to find out that a planned lending alternative might not be available to you. If your car has a lien on it, this means you will need to pay off your car before getting a loan against the title. Here are some alternative ways you might be able to raise money for an emergency event.

  • Do you have a less-valuable vehicle that you might be able to sell? Even if you have an old car that you don’t think is valuable, as long as it is in working order, you will be able to get some money for it through a title loan.
  • Work with the institution or person with whom you owe money or need services. Before you seek out alternative funding for things like medical bills, always ask the provider to work with you on payments. Medical providers, especially, are legally unable to turn you away in the event of an emergency (like a broken leg, appendicitis, or a heart attack) if you don’t have payment, but letting them know that you might not be able to make payments up front will allow you to get the help you need without having to worry about where you are going to get a lump sum to pay for it. Additionally, student loan institutions are often very willing to work with their lenders on income-based repayment plans.
  • Ask a family member or friend for help. It can be hard to ask for help when you need it, but sometimes that is the best way to go. Alternatively, if you know a friend with a car that they might be willing to offer as collateral in exchange for you making payments toward that collateral, that might also be an option. Just be sure to let the friend or family member know that they are legally responsible for paying back a title loan on their car even if you cannot afford to pay it.
  • As a last resort, some title lenders will offer you a loan with a lien on your car. Mid-South title loans does not recommend this avenue for many reasons, but it is an option. Companies who offer loans to cars with liens on them buy cars outright from the owner and make you pay back the full value of the car, whereas you only get the difference in the value of the vehicle minus the amount you still owed on a car. For someone already struggling financially, the payments could become too much.

Mid-South Title Loans is a hometown establishment you can trust for title loans in Tennessee. With three separate locations across Memphis, you have options available to you for alternative lending avenues. To learn more, or for general information about title loans, contact our main number at (901) 565-0005. Or, visit our website for information specific to one of our locations. We look forward to serving you.


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1680 Winchester Rd
Memphis, TN 38116
Phone: (901) 346-1040

4965 Summer Ave.
Memphis, TN 38122
Phone: (901) 821-9211

2798 S. Perkins Rd.
Memphis, TN 38118
Phone: (901) 794-5460