Car paid off in Maryland? What to do with the Security Interest Filing and Title
We recently paid off our Malibu loan with a credit card balance transfer. Not only did this reduce our interest rate from 5.85% to 1.99%, it also meant we paid off the lien on our car and were entitled to receive the full title and ownership.
Shortly after paying off the loan, we received a document from the bank that looks exactly like the blue Certificate of Title, but it’s red. This is called the Maryland Notice of Security Interest Filing. 
Since this is the first car I’ve ever paid off in full, I was wondering what to do next. In addition, we’re pondering selling the Malibu, so we’ll need to know what documentation we’ll need. I couldn’t find any simple answers for my questions, so I decided to call the Maryland MVA directly. And then I decided to write it down for all of you.
What is the difference between a Security Interest Filing and the Certificate of Title
In Maryland, if you took out a bank loan (a lien) on you car, the bank is issued the “Notice of Security Interest Filing”, while you are issued the “Certificate of Title”. Your title will list your bank as the lienholder, and you can’t do anything with the vehicle (sell, trade) without the red Security Interest Filing document issued to you.
When will I get the Security Interest Filing?
At any time you pay off your car loan in cash or non-auto loan, the lienholder will release this semi-title to you. An example of a non-auto loan is a credit card transfer or a home equity loan.
What do I need to sell my vehicle?
I highly recommend calling the Maryland MVA directly or visiting their title FAQ site as your situation may differ, but for our 2005 Chevy Malibu, when it comes time to sell, we’ll need the following:
- original Maryland Notice of Security Interest Filing (the “Red” one)
- original Maryland Certificate of Title (the “Blue” one)
- a notarized Bill of Sale form
What do I give to the buyer?
According to the MVA website:
Always Provide to the Buyer the Original Title, and the Original Security of Interest Filing, so that the Buyer Will Have Evidence that the Vehicle Being Sold Has Been Paid Off in Order to Obtain the New Title
Also, you’ll want to fill out the back of the Certificate of Title per the MVA’s instructions:
The seller must sign and print his or her name and the buyer’s name and address on the back side of the “Certificate of Title” under the “Assignment of Ownership” section. The buyer’s name and address must be recorded in the “Assignment of Ownership” section to complete the sale. Without the name, the title is considered “open” and will not be recognized by the MVA for registration.
Ok, so I give them all this stuff, then what do I need to do?
After you’ve given the buyer all required documentation (be sure to check with the MVA for your situation), and you’ve ensured their payment method was valid, then
- Head to the MVA and drop off your license plates<.li>
- Then cancel your insurance
Do not cancel your insurance before turning in your plates. It’s against the law
Per the MVA:
Maryland law is extremely strict and uninsured motorist fines begin at $150 for the first day a vehicle is not insured. Unless the seller is transferring the plates to another vehicle, return the license plates to the MVA and retain the receipt, before canceling the insurance coverage on the vehicle.
And that’s it! You’ve sold your car!
Disclaimer: It should be clear by now that you need to call the MVA for your specific situation. Cars older than 7 years fall under different rules, and I’m sure commercial vehicles have other rules. Just call them to be safe!
Try one of these related posts too!:
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- Chevy Malibu sale update #2
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What was your balance transfer fee? If it was 0, i’d say that this was a good decision. So does this mean you are planning on getting rid of the malibu?
The fee was $75, but I saved that much in interest over just a couple months. I also took out a few thousand extra and stuck it in a 6% savings account to try to recoup some more.
If you’re in the market for a Malibu, let me know. Otherwise, we have to do some serious thought on the impact of selling it. We’d probably want to get a tune-up on the pontiac and check it for potential failure before committing though.
Thank you so much for the information, I too have just paid off my loan in Maryland and received the security interest filing certificate and I had no idea what to do with it. Now I know, I’m glad you posted this valuable information otherwise I thought I would have to go to the DMV and waste hours of time.
This is exactly the situation I found myself in. Your article was very helpful and was the first one that came up when I googled “Maryland Notice of Security Interest Filing.” In my case, I am not selling my car, but just wanted to know whether I needed to apply for a new title. My course of action is to take my Notice of Filing and Group it with my Title in the safety deposit box.
Hi this was very informative but there seems to be a catch-22, if you have a car that is financed and you want to sell it, it appears you need to pay-off the loan before you can sell it, but most people (assuming what the balance is) may need to sell the car before they can pay-off the loan. What’s a seller (or buyer) to do in this situation? With a house, you have a loan closing that is simultaneous, i.e. the buyer’s loan pays-off the seller’s loan. Is there any way that Maryland used car buyer safely buy a car from someone who hasn’t paid-off their loan, thereby enabling the seller to clear the loan?
@Karl, in MD, you can sell the vehicle, sign over the title, pay off the loan, receive the security interest filing, sign that over and send it to the buyer.
Yes, the buyer must wait to register it in their name till they get it, but the title you signed over is proof of a pending transaction. Personally, I think it’s a nice safeguard that the buyer’s check is legit b/c the bank won’t release the document until it clears.