What is a Second Lien Title Loan?
When it comes to getting a title loan with a lien holder already on the title, there are a couple different options available, and each option will work a bit differently.
The title loan company can take over the lien on your car title by paying off whatever you owe to the current lien holder. The most common way for the title loan company to do this is by taking the lien balance out of your title loan amount.
Another option is that the lender will allow the current lien holder to remain in place, and only pay them if you default on the title loan. Of course, the title loan company will need to take into account how much it would need to pay the lien holder should you default and subtract that from your loan amount. You’ll still get the same amount of money, and the only difference will be if the title loan company becomes the lien holder or not.
The process works the same regardless of what type of company is the lien holder. A title loan company could pay off the bank that helped you finance the car, or even another title loan company.