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Can I Get a Car Title Loan Without a Clear Title?

Can I Get a Car Title Loan Without a Clear Title?

A car title is a legal document that provides the proof of ownership to a specified vehicle. In addition to the proof of ownership, the car title provides important information about the vehicle, such as the VIN number and the full name and address of the owner. A person can use their car title to secure a loan which is known as a car title loan. Car title loans are known by many names including auto title loans, vehicle title loans, and vehicle collateral loans. You can still use your car for the duration of the loan’s term, but if you default on the loan, your car will be repossessed and sold. The question now becomes, can I get a car title loan without a clear title?

Can I Get a Car Title Loan if my Title Isn’t Clear?

No, unfortunately, you cannot get a car title loan if the car title isn’t clear. You must own your car entirely and have no other liens or obligations against your vehicle if you want to obtain a car title loan. In other words, a lender is not going to risk lending money to someone who doesn’t have a clear car title because, if the borrower defaults on the loan, they are not first in line to recover their money and may not be able to receive any compensation for the money lost.

Auto Financing 101
Take a look at this infographic for everything you need to know about auto financing.

Car Title Loan Requirements

One of the great things about title loans is the minimalistic requirements. Most financing forms have a long list of requirements which can make it challenging to get approved. Title loans are a good way to get quick cash without a big hassle.

  • General Requirements. You must be a Canadian citizen or permanent resident and be the age of majority in your province or territory (usually 18 years of age). You’ll also need a piece of government-issued identification and proof of employment status or income.
  • Own a Vehicle. In order to get a title loan, you must own a car or another vehicle, such as a truck, motorcycle, or boat. The vehicle must be worth something otherwise the lender may not be comfortable using it as collateral. Usually, lenders will extend half of what your vehicle’s appraised value is.  
  • Vehicle Title. You must have a vehicle title in your name only to obtain a title loan. Some lenders accept co-owners on a title, but it depends. The title must also be clean and lien-free. This means that other lenders do not have any interests in your car as collateral against an existing loan and you own your car entirely.

For even more information about title loans, check out this article.

Advantages and Disadvantages of a Car Title Loan

Every form of financing has corresponding pros and cons, title loans are no different. As always, you should be sure to take the time to assess your current financial state and future goals when making any monetary decision.


  • No Credit Requirements. Unlike most loans, you do not need to have good credit to get approved. Lenders rely entirely on the car title as collateral for the loan so good credit is not necessary.
  • Relatively Better Rates. Compared to other non-traditional lending option, like payday loans, car title loans tend to have more affordable interest rates. Although, this isn’t always true, be sure to read the fine print.
  • Fast Cash. The approval time is rapid for car title loans. Typically, for in-person car loan applications, you can get approved the same day and for online applications, you can get approved by the next day.


  • Risk Losing Your Car. If you are unable to repay the loan, the lender has the right to repossess your car and sell it. A car is a necessity and required to earn a living for many people, be sure that you consider this before risking losing your car with a title loan. Some may end up in a worse financial situation if they lose their vehicle.
  • Expensive. Even though title loans have better rates compared to other non-traditional lenders, they are still expensive compared to other types of financing on the market. There may also be costly, applicable fees on top of the already expensive interest.
  • Untrustworthy Lenders. Unfortunately, not all lenders are made equal. Some are more dishonest and disreputable than others, including car title loan lenders. To avoid getting yourself into a bad financial situation, do your research on both the creditor and the terms of the loan.
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What to do When You Can’t Get Approved for a Title Loan?

If a car title loan doesn’t sound right for your financial situation or you can’t get approved for a title loan, there are alternatives. Be sure to consider your financial situation and goals before making a final decision on what option is right for you.

Do you need financing to cover an emergency cost?

Every now and again life happens and it can be a huge pain and hassle to deal with an emergency cost. Sometimes, in order to cover the cost of an emergency, you will need external financing. If this is the case, consider using an unsecured personal loan.

Do you own a house?

If you need financing and own a home, consider using a home equity loan. These loans use the equity you have in your home, the total house value minus the amount you owe against the house, as collateral for the loan.

Are you tackling consumer debt?

Title loans are commonly used by individuals who are already struggling financially given that good credit is not a requirement for approval. If you were aiming to use a title loan to tackle debt, consider using a debt relief product instead. There are several debt relief products on the market including debt consolidation programs and consolidation loans.

Can you trade in your vehicle if it isn’t paid off? Find out here.

Final Thoughts

If your car title is clear, Loans Canada can help match you with a title loan lender today. Unfortunately, if your car title isn’t clear, you likely won’t get approved for a title loan. The good news is that there are ample financial products on the market meaning you have options. Loans Canada can help you find the right product today to achieve your financial goals.

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Posted by in Auto
Veronica is a freelance writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog posts for companies in the financial sector. Veronica's background is in accounting as she graduated from Western University in 2017 with a degree in accounting. She is passionate about using her accounting expertise to help others with their personal finance questions and issues and enjoys using her writing to educate Canadian readers. When Veroni...


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