Removing a Lien in North Carolina
If you’re still making payments on your auto loan, you probably have a lien on your car title. Once the loan is fully paid off, you can obtain a lien release from the North Carolina Division of Motor Vehicles (DMV) and will officially own your car.
What Is a North Carolina Car Lien?
A car lien is a kind of security your auto loan lender—your lienholder—places on your car title until you pay off the loan and apply to have the lien removed.
The purpose of a lien is to provide the lender with financial protection until you satisfy the loan. Therefore, the lienholder has legal right to repossess the vehicle if you stop making car loan payments.
Other Types of Liens
Primarily, we’ll be covering the car liens lenders place on titles until loans are paid off. However, it’s important to understand there are other kinds of car title liens you could encounter.
For example, a mechanic might place a lien on your vehicle if you don’t pay for repair services. Same thing goes for companies that tow or provide storage for vehicles. Also, a person or business might put a lien on your title if you use your car as collateral in a transaction. A lien can even be placed on your vehicle as part of a divorce settlement.
Obviously, these are situations specific to your circumstances, so you’ll need to work with the lienholder and an NC DMV agent to get specific instructions on how to satisfy the lien and have it removed from your title.
Who Are Lienholders?
Lienholders are the individual people or companies responsible for issuing your car loan.
Typically, lienholders are financial institutions like banks or credit unions but, depending on how you obtained the money to buy your car, your lienholder might be the car dealer or an individual person who gave you a personal loan.
The NC DMV considers your lienholder to be the vehicle’s legal owner until you pay off your car loan and apply to have the lien removed.
Remove a Lien from an NC Title
Once you’ve paid off your auto loan, you can apply for a clear title (i.e. remove the lien) by submitting the following at your local NC DMV office:
- Application for Removal of Lien from the Certificate of Title (Form MVR-8).
- Application for Duplicate Title (Form MVR-4).
- Your lienholder must complete the bottom portion of the form indicating they’re releasing ownership of the vehicle because you’ve satisfied the lien.
- All documents from your lienholder, including the original car title and any other proof of lien release paperwork.
- An acceptable proof of identity.
- The $20 duplicate title fee.
- NC DMV office locations accept cash, personal checks (must be accompanied by 2 forms of identification), money orders, and major credit and debit cards.