Removing a Lien in Tennessee
When you take out an auto loan to pay for a vehicle in Tennessee, your lender will place a lien on the car title. The vehicle isn’t legally yours until you pay off your loan and have the lien removed, after which you can apply for a clear title at your county clerk’s office through the Tennessee Department of Revenue’s (DOR) Vehicle Services Division.
We’ll cover everything you need to know about removing a lien in TN on this page.
What Is a Car Lien in TN?
A car lien is a legal agreement that your auto loan lender—or lienholder—can repossess the vehicle if you default on the loan or stop making payments. Even though you’re the one driving the car to and fro, it legally belongs to the lienholder until you pay off the loan.
Once you satisfy the lien (i.e. pay off the loan) and have the lien released, the car is legally yours.
Other Types of Liens
For this page’s purposes, we’ll primarily talk about the type of lien placed on your car title when you finance a vehicle. However, be aware there are other types of car liens which could be placed on your vehicle title if you, for example:
- Fail to pay for car-related services like repairs, storage, and towing.
- Use your car as collateral in another negotiation.
- Consent to it as part of a divorce settlement.
Clearly, these are unique situations, so it’s best to discuss your payment and lien-removal options with the lienholder and a TN DOR agent.
Who Are Tennessee Lienholders?
Your lienholder is the person or business that gave you the auto loan and therefore keeps your car title until you pay back the loan. Your lienholder has the power to repossess the car if you fail to make payments, which not only leaves you without a ride, but could also damage your credit.
Usually, car buyers get loans from financial institutions like banks and credit unions, though you might also get your loan directly from a car dealer or an individual person who gave you a personal loan.
Remove a TN Car Title Lien
When you finish paying off your auto loan, your lienholder will:
- Send you the title marked to indicate the lien is released and the release date.
- Notify the TN DOR the lien is released.
You don’t have to apply for a new title; this properly marked title serves as proof that you’re now the vehicle’s legal owner in Tennessee.
However, you have the option to apply for a duplicate title—one without your lien history—if you wish.