can you transfer a car title with a loan

[StZoe]

No, you cannot directly transfer a car title while a loan is still active. The vehicle's title is held by the lienholder—the bank or finance company that provided the loan—until you've made the final payment. They have a legal and financial interest in the car, so the title cannot be cleared for a new owner until the loan is satisfied. The process involves extra steps to ensure the lender gets their money.

The standard procedure is for the seller to pay off the loan balance first. You must contact your lender to get a 10-day payoff amount, which is the exact sum needed to close the loan account, including any accrued interest. Once paid, the lender will release the lien and send you the title or directly to your state's DMV. Only then can you sign the title over to the buyer.

In some cases, the buyer's lender might handle the payoff if you're trading the car into a dealership. Private party sales are trickier. Some states allow the buyer to bring a cashier's check made out to your lender to the sale, which you then forward for payoff. This requires careful coordination and trust.

Key Steps in a Private Sale with a Loan:

Step	Action	Key Consideration
1	Contact Your Lender	Obtain the exact 10-day payoff quote and instructions for title release.
2	Coordinate with Buyer	Be transparent about the loan; decide on a secure payoff method.
3	Handle the Payoff	Use buyer's funds (e.g., cashier's check to lender) to pay off the loan.
4	Receive Lien Release	The lender will send a lien release document to you or the DMV.
5	Transfer the Title	Once the title is "clean," you can sign it over to the new owner.

Attempting to transfer a title without the lender's knowledge is illegal and considered title jumping, which can create massive legal problems for the new owner. Always follow the proper legal channels to ensure a clean transfer.

[VonOlive]

It's a bit of a hassle, but it's doable. The key is the lienholder—the bank that gave you the loan. They technically own the car until you pay them off. So, step one is always to get the payoff amount from them. In a private sale, the safest way is to have the buyer bring a cashier's check made out directly to your lender. You meet at the bank, they hand over the check, the bank processes the payoff, and then they can start the paperwork to get you the clear title to sign over. It adds an extra step, but it's the only way to do it right.

[DeCalvin]

I sold my car last year while I still had a loan on it. The biggest lesson was communication. I had to be upfront with the buyer about the situation. We agreed on a price, then I called my credit union to get the payoff figure. The buyer got a bank check for that amount, plus a separate check for my equity. We met at the credit union branch together. They handled the payment right there, and the credit union gave us a receipt and started the lien release process. It felt secure for both of us because the financial institution was the middleman.

[RobertLynn]

From a legal standpoint, transferring a title with an outstanding lien is prohibited. The certificate of title acts as proof of ownership, and the lender's name is listed as the lienholder. This "cloud on the title" must be removed before a transfer can occur. The proper sequence is loan payoff, followed by the lender issuing a formal lien release (often Form UCC-3). This document, along with the now-clean title, is what you submit to the DMV to complete the sale. Skipping this creates a break in the chain of title, invalidating the transfer and preventing the new owner from registering the vehicle.

[VanEzra]

Be very careful. The main risk is that the buyer gives you money, you promise to pay off the loan, but then you don't. They're stuck with a car they can't legally own, and you're in big trouble. If you're "upside down" on the loan (you owe more than the car's worth), it's even harder. You'd have to come up with the difference yourself to pay off the loan before selling. Honestly, if it's a private sale, the safest bet is to pay off the loan yourself first if you can, so you have the physical title in hand. It simplifies everything.