Vehicle Title Loan Rules

Summary

In Texas, lenders can hold a vehicle title until all loans, including unsecured ones, are paid off if a cross-collateralization clause exists. Review your loan agreement or consult a local attorney for specific advice. Contact the Texas Department of Motor Vehicles for more information.

Full Conversation

I’m trying to sale my vehicle but the bank won’t release the title until I payoff my unsecured loan. Is this legal?
Hello ****, could you please tell me which state you're located in? Laws regarding vehicle sales and loan payoffs can vary by location.
Texas
In Texas:
- A lender can hold the title until all loans are paid off.
- You can sell the vehicle, but the title won't be transferred until the loan is cleared.
For more details, contact Texas Department of Motor Vehicles:
Phone: (*) *-*
Website: www.txdmv.gov
Even for a completely separate unsecured loan?
Yes, even for a separate unsecured loan. If the bank has a cross-collateralization clause in your loan agreement, they can hold the title until all debts are cleared. Please review your loan agreement or consult a local attorney for specific advice.
Thank you
You're welcome, ****! If you have any more questions in the future, don't hesitate to ask. Good luck with your vehicle sale!