Yes, you may be able to get a title loan on a financed car, but it works differently than a standard title loan.
A standard title loan needs a clear, lien-free title. While you are still making payments, your current lender holds the title, so it cannot be used until that loan is paid off.
To qualify, your car must be worth more than you still owe. That extra value is called positive equity. When you have it, we pay off your auto loan, release the title, and use it for your title loan, subject to state law and our underwriting rules.6
This works best when you have only a small balance left to pay. You must also show you can afford the payment. That is one of the main things we check before approval.5
Three Reasons You May Not Have Your Car Title
- You still owe on your car loan. That is a financed car. This page walks you through it.
- You are still paying off another title loan. Our guide to refinancing a title loan covers that.
- You lost your title. Our guide on getting a title loan without your title in hand shows the steps.
Key Takeaways
- You can get a title loan even if you still owe money on your car, as long as the car is worth more than you owe.6
- The less you still owe, the better your chance of approval and the more money you can get. Loans usually range from a few hundred up to several thousand dollars.6
- Part of your loan pays off your current car loan first, and you keep what is left.
- You keep driving your car the whole time. We hold only the title, not the car.
- Title loans carry a high APR and fit short-term needs only.7 Review the payments before you sign and be sure you can repay; if you stop paying, the car can be repossessed.9
From Our Underwriting Desk
“Many borrowers think they don’t qualify for a title loan because they’re still making payments on their car. In many cases, that’s not true.
If your car is worth more than you still owe, we may be able to pay off your current auto loan and replace it with a single title loan, subject to eligibility and state law.
We’ll calculate your available equity and provide a free, no-obligation loan estimate, so you know exactly where you stand before making a decision.
One thing I always point out is that you’ll receive less cash than if your car were fully paid off, because part of your title loan is used to pay off your existing auto loan.”
Bryan Solis, Head of Underwriting and Lending Operations
How It Works on a Financed Car
A regular title loan is simple. Your car is paid off, so we lend you money and hold your title until you pay us back.
A financed car has one extra step, because your current car lender already holds your title. Before we can lend to you, we pay them off first.
Your title loan comes in two parts. Part one pays off the balance on your current car loan, sent straight to your lender.
Part two is cash that goes to you. You repay the whole title loan to us over time, and from then on 5 Star Car Title Loans holds the title.
Only the paperwork behind the title changes.
How Much Money Can You Get?
How much money you get depends on two things: what your car is worth, and how much you still owe on it. Your state also sets its own limits on loan amounts, which you can check in our guide to title loan laws by state. One example shows this better than any explanation, so we pulled a loan we funded from our records to walk you through exactly how the money splits.
A 2023 Ford F-150 We Funded in Kentucky
This truck is on our Kentucky locations page. It was worth about $29,000, and the owner still owed $3,000 on his car loan. Here is exactly what happened:
- Total title loan: $7,967
- Paid off his car loan: $3,000, sent to his lender
- Cash he kept: $4,967
In plain words: because he still owed $3,000, he walked away with $4,967 in cash. If the truck had been fully paid off, the same loan would have put the full $7,967 in his pocket.
What We Check Before We Approve You
Can You Afford the Payment?
This is the most important part. More than your credit score, we look at whether you can comfortably make the payment.5
We check your income with recent pay stubs, 1099s, or about 60 days of bank statements. On a financed car this matters even more, because the new payment is often higher than your old one.
What Your Car Is Worth
We value your car using trade-in and wholesale price guides like Black Book, Manheim, and NADA. These run lower than a dealer’s asking price. Want a rough idea of your car’s value before you apply? Check a free guide like Kelley Blue Book.
Your 10-Day Payoff Letter
This is the one paper you bring us. You ask your current car lender for a “10-day payoff letter.” It shows the exact amount to pay off your car loan, good for 10 days.
Every lender knows this form, so it is easy to get, and if you are not sure how, we walk you through it. The Consumer Financial Protection Bureau explains the payoff amount.
What About Bad Credit?
Bad credit usually does not stop you. Your car secures the loan, so your credit score carries less weight than it would at a bank. We may still run a credit check as part of final approval, depending on your situation.6
What You Bring, and What We Handle
What you bring:
- Your car title, or your 10-day payoff letter if your lender is holding the title
- Government photo ID
- Proof you live in the state, like a utility bill
- Proof of income, like recent pay stubs
- Proof of car insurance
- A few photos of your car: all four sides, the dashboard, the odometer reading, the VIN plate, and any damage
What we handle for you:
You sign one short form that lets us contact your current lender and handle the title paperwork. From there, we call your lender, arrange the payoff, and take care of the DMV steps to put the title in our name. You do not deal with the DMV or chase your old lender. We never ask for your bank login or passwords.
Common Worries, Answered
- “Owing on my car means I cannot qualify.” Usually not true. As long as the car is worth more than you owe, you can qualify.
- “My bank will be upset or charge me.” No. Your bank just receives a normal payoff, the same as it would in any refinance.
- “They will take my car right away.” No. We hold the title, not the car, and you keep driving as long as you pay. Just be aware that if you stop paying, the car can be repossessed,9 the same as with any loan backed by a vehicle, so borrow only a payment you can handle.
What To Do Next
Applying is free and puts you under no obligation. You share a few details about your car and yourself. After we review your documents and pre-approve you, we show you your offer.
When you get your offer, look at it closely:
- How much money you would receive
- How much goes to pay off your current car loan
- Your monthly payment, the schedule, and the APR, which is the yearly cost
Make sure the payment fits your budget, so you never fall behind and risk losing your car. Use our guide to title loan interest rates and our title loan calculator to check the numbers. It is smart to compare offers from more than one licensed, reputable lender before you decide.
Fill out our request form or call us for your free, no-obligation offer.3
Frequently Asked Questions
How Can I Get Out of My Financed Car?
If a title loan is not right for you, here are other ways to get out of a car you are still paying on:
- Sell the car and use the money to pay off the loan. If it sells for less than you owe, you cover the difference.
- Trade it in at a dealership. The dealer pays off your loan and you move into a different car.
- Refinance your car loan to lower your monthly payment or interest rate.
- Loan assumption, where someone else takes over your loan, if your lender allows it.
- Voluntary surrender, a last resort where you return the car. This hurts your credit and you may still owe money.
Can the Car Inspection Be Done Online?
In many cases, yes. Instead of bringing your car to a store, you can often do it online with no store visit, just by uploading a few clear photos of your car. Some situations still need an in-person look, but for most financed cars the photo option works and saves you a trip.
What If I Owe More on My Car Than It Is Worth?
Then you have what is called negative equity, which means you owe more than the car is worth. In that case we cannot approve the loan, because it would not be enough to pay off your current car loan.
How Fast Can I Get My Money?
Once you are approved and sign, funding can happen the same day.8 How fast depends on your state and how quickly your current lender processes the payoff.
