Lower your car payment in Texas

What’s different about refinancing a car loan in Texas

Vehicle titles in Texas are issued by the Texas Department of Motor Vehicles (TxDMV).

• A lender that gives the buyer outstanding balance information is bound by it and must honor it for a reasonable time, and once that amount is tendered as payment in full the lender must accept it and release its lien on the vehicle no later than the 10th day after the tender.

  Source: Texas Finance Code Chapter 348, Sec. 348.408 (Texas Statutes)

• When the debt secured by the lien is satisfied, the lienholder must execute and deliver a discharge of the lien to the owner or the owner's designee, and the owner may then submit that discharge together with the title to TxDMV to obtain a new title.

  Source: Texas Transportation Code Chapter 501, Sec. 501.115 (Texas Statutes)

• Adding or removing a lien on a Texas title is done at the local county tax office; adding a lien requires the vehicle title and a completed Application for Texas Title and/or Registration (Form 130-U), while removing a lien recorded on a paper title additionally requires a release of lien letter from the lienholder.

  Source: TxDMV - Add/Remove a Lien on a Vehicle

• If the lien was recorded electronically, the lienholder coordinates the release directly with TxDMV and no action is required from the owner; upon receiving the electronic release notification the department automatically converts the e-Title record to a paper title and mails it to the recorded owner or third party.

  Source: TxDMV - Add/Remove a Lien on a Vehicle

• Texas does not require a lender to obtain a court order before repossessing a financed vehicle. Business and Commerce Code Section 9.609 permits a secured party to take possession either through judicial process or without it, provided the repossession is accomplished without a breach of the peace.

  Source: Texas Statutes, Business and Commerce Code Sec. 9.609 (Secured Party's Right to Take Possession After Default)

• Under Business and Commerce Code Section 9.623, a Texas borrower may redeem a repossessed vehicle only by tendering fulfillment of all obligations the vehicle secures, plus the lender's reasonable expenses and attorney's fees. That right ends once the lender has disposed of the vehicle or entered into a contract for its disposition.

  Source: Texas Statutes, Business and Commerce Code Sec. 9.623 (Right to Redeem Collateral)

• In a consumer-goods transaction, which covers a car financed for personal, family or household use, Section 9.614 requires the lender's notice before sale to include a description of any deficiency liability of the person receiving it, plus a telephone number from which the borrower can obtain the exact amount needed to redeem the vehicle.

  Source: Texas Statutes, Business and Commerce Code Sec. 9.614 (Contents and Form of Notification Before Disposition: Consumer-Goods Transaction)

• Finance Code Section 348.118 lets a Texas retail buyer prepay a motor vehicle installment contract in full at any time before maturity, and the section expressly states that it prevails over a conflicting provision of the contract, so contract language cannot block an early payoff.

  Source: Texas Statutes, Finance Code Sec. 348.118 (Prepayment of Contract)

• Transportation Code Section 501.114 lets a recorded lienholder assign its lien to another company without making any filing or giving any notice under the title chapter, and the assigned lien stays valid, perfected and keeps its original priority, so the lienholder shown in title records may not be the current holder.

  Source: Texas Statutes, Transportation Code Sec. 501.114 (Assignment of Lien)

• Where a Texas title carries the optional rights of survivorship agreement described in Transportation Code Section 501.031, ownership may be transferred only by all the named persons acting jointly while they are living, and the agreement may be revoked only by their joint application for a new title.

  Source: Texas Statutes, Transportation Code Sec. 501.031 (Rights of Survivorship Agreement)

These are general procedural facts about Texas, not advice about your loan. Rules change, and your lender’s own process may add steps — a licensed specialist can tell you what applies to your situation.