Can you get a title loan on a financed car?

Quick Answer Yes, you can get a title loan on a financed car as long as you have enough equity in the vehicle. However, the process may be more complicated compared to getting a title loan on a vehicle that is fully paid off.

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Doreen Dumesle Answer updated on May 28, 2023

Fact checked by Steven Hill

While most title loan lenders will not lend against a vehicle you’re still financing, some lenders will. It’s all based on your vehicle's equity and the consent of both your auto loan and title loan lender.

Start by crossing your fingers (😣🤞) and contacting your auto loan lender to ask about their policy regarding secondary liens, which is a second claim of ownership to your vehicle.

If they are willing to allow a second lien on your vehicle’s title, your next step will be to ask them for written permission along with any stipulations. Once you have that, you can hunt down a lender willing to extend you a title loan based on the equity you own (what you've paid off) in your vehicle.

Learn: Where can I get a title loan?

Another way some lenders issue title loans on financed vehicles is by paying off your outstanding auto loan, obtaining your vehicle’s title (to become the sole lien holder), and then tacking the cost of that payoff onto your title loan’s principal amount.

In other words, if you wanted to borrow $2,000 and have an outstanding auto loan balance of $7,000, you would finance a total of $9,000 at an average APR of 300%. This would leave you owing a total of $11,250 in just 30 days 😱, and this is what you DO NOT want!

Learn: What happens if you don’t pay a title loan back?

Title loans are what’s known as “short-term loans” which means they are designed to be paid off quickly. So, my advice, only get a title loan on the equity you own. This will help you avoid drowning in debt and keep your repayment sensible.

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