Yes, you can scrap a car with a title loan, but only after you have paid off the loan in full and obtained the title from the lienholder. The critical point is that the lender holds a lien on your vehicle's title, meaning they have a legal financial interest in the car. You do not have the right to sell or dispose of the asset until you satisfy that debt. Attempting to scrap the car without the lender's permission is illegal and can lead to serious consequences, including being sued for the remaining loan balance and accusations of fraud.
The process is straightforward but requires patience. Your first step is to contact your title loan lender and inform them of your intention. They will provide you with the exact payoff amount, which is the total sum needed to clear the debt, including any outstanding principal and accrued interest. Once you make this payment, the lender is legally obligated to release the lien and send you the clean title.
After you receive the title in your name with no liens listed, you are free to contact a scrap yard or salvage yard. They will require the physical title to complete the transaction legally. If paying off the loan isn't feasible, your only other legal option is to sell the car privately. However, the sale price must be high enough to cover the loan payoff, and the transaction must be coordinated with the lender to transfer the title correctly to the new owner. Scrapping a car under a title loan without following these steps is not a viable shortcut.
