Removing a Lien in Alabama
When you take out a car loan, you will not gain sole ownership of the car until your loan is completely paid off. In order to reflect that you do not own the car outright, your lender will have a lien on your title. Once you are done paying off your loan, you can remove the lien.
What Is a Lien?
A lien is a form of security interest placed on a piece of property. It acts as a type of insurance to the property's owner to ensure that they will receive the full payment of a debt or some other type of obligation.
In the case of a car title lien, the document essentially gives a lien holder the right to repossess the car if the car buyer defaults on their loan payments.
Who Is a Lien Holder?
When dealing with a car title, the lien holder is the person or entity that issued your car loan. Many times, a lien holder is a bank or a financial firm. Frequently, while a lien exists on a car loan, the lien holder will be in possession of the car's title.
Remove a Lien from Your AL Title
In Alabama, you can start the process of removing the lien and transferring the title over to your name once you've finished making payments on the car loan. Keep in mind that you will not be able to transfer your title before the lien is released.
Take the following steps to get your Alabama vehicle lien released:
- Have your lender complete an Application for a Lien Release (Form MVT 5-63).
- Gather your current vehicle title.
- If your title is missing, first request a duplicate online by visiting the Public Title Portal.
- Submit the above to the Motor Vehicle Division by mail at the address listed on the lien release application, or in person at your local office.
Out-of-State Lien Holders
If you have just moved to the state and your car has a lien against it, the MVD will not issue you a title, if the title was issued to the lienholder.
However, you can register your car without getting an Alabama title by bringing a copy of your title certificate to a license plate issuing office.
If your car has a lien hold against it, and your previous state issued the title to you, Alabama will issue you a title. Bring your title certificate to a license plate issuing office to begin your Alabama vehicle title transfer application.
For more information about getting your out-of-state lien removed, contact your local county license plate issuing office, and your lienholder.
NOTE: If your car was originally titled in any of the following states and your lienholder has the title, you must provide the MVD with documentation from your previous state proving that the lienholder possesses the title:
- South Dakota.
Lost Alabama Titles
If you've satisfied the lien on your car title, then subsequently lost the new title, you will need to apply for a duplicate title. Our page on replacing your Alabama title has more information.
If you have lost your title before the MVD was notified of the lien release, you will have to take the steps listed above to apply for a clean duplicate AL title.
- MVT 5-63