Removing a Lien in Texas

When you take out a loan to finance your car, there will be a lien placed on your car title. While the lien is in place, the car will not legally be considered your property. You must first get it removed at the Texas Department of Motor Vehicles (DMV).

What Is an Auto Title Lien?

When a service provider, lender, or property owner wants to protect themselves against the chance of not receiving full payment on a loan or bill, they can use a lien. It's a form of collateral.

The lien on your Texas car title gives your lienholder the right to repossess your car if you default on or stop making payments towards your loan.

The TX DMV or your lienholder will have to contact you before the vehicle is seized.

Who Is a Texas Lienholder?

A lienholder is typically the person or corporation providing the money or service up front in a transaction. Most of the time, a lienholder is a bank, credit union, or other financial institution.

The lienholder on your car title will be the individual or business who issued your car loan. While you're paying your car loan in Texas, your lienholder will be in possession of your title and may be referred to as the legal car owner.

Removing a Lien from a TX Title

After receiving your last payment, your lienholder will have 10 business days to release the lien.

If you have an electronic title, your lienholder will then simply remove the lien electronically and notify you once the lien release is complete.

If your vehicle has a paper title, the lienholder must mail you:

  • The TX car title certificate.
  • A lien release letter.
    AND/OR
  • Other notifications sent from the lienholder to release the lien.

You will then be responsible for completing the lien removal by submitting the above, along with a completed Application for Texas Title (Form 130-U), to your local Texas Department of Motor Vehicles office.

You will pay a fee when you apply to remove the lien from your title.The fee will be $28 or $33 depending on your county of residence.

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