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!
Possibly related posts:
- Paying off a $15,000 car loan in 9 months without using savings
- The check has been sent! About 8 months till we pay off $15,000
- Smart Car for Sale in Rockville, MD – Can you guess the price?
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Clever Dude and his bride started with $500k in debt and in just 4 years, it's down to $300k!
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.
Hi, this information is useful for my, but I would also like to know it was color the “Maryland Notice of Security Interest Filing” in the year de1998. The above-mentioned is because I am expert and they are questioning me the authenticity of this document. I wait they can help me. Ahead of time, thank you.
@Anabel, I’d say you would have to call the Maryland Vehicle Administration (MVA) to ask them (unless they’re the ones questioning the authenticity).
I need to know what to do to get my lein release. Our truck has been paid off for 5 yrs and i guess never thought about the lein. We have never recieved a red release form. Someone tell me what I need to do.
@Joyce. Assuming you live in Maryland (other states’ rules differ), I suggest calling the bank/credit union with which you had the loan. They should have it on their records. If they can’t find it, call your DMV. You’ll need proof from your bank that you paid off the loan and they should provide the release form.
Clever Dude,
Thanks for the tips. I have been trying to contact the MVA for more then 3 hours. The line is always busy. After searching the web, I ran across your web site, which is very helpful. You have saved me a lot of time having to contact the MVA over and over again. Thanks a lot.
What is the official capacity on the lien.. what suppose to be written there when signing off the lien? Thanks
Hey, thanks for the helpful info. It was just what I was looking for.
But my case is somewhat complicated and I have been calling everywhere, still no solution.
I’ve purchased a car in Georgia with financing (lien), then paid it off when I was living in Maryland. So I did receive the Notice of Interest Filing, but I never got the actual title and was lost by the bank that financed the car.
So I am stuck with a car that belongs to me with no way to prove that it is mine.
Any tips on what I should do? And about the Notice of Security Interest Filing, does it serve as a “lien release” or is that something else?
Thanks again.
PK, sorry about your situation! I’m not one to advise on this situation except to say that the titling rules depend on where you last titled the car. Therefore, if the car was bought and titled in Georgia, then this article about Maryland documents doesn’t apply. If you had registered the car here in MD, then I believe it would, but it sounds like Georgia lost the title, so you have to track it down through them. Good luck!
Do you know how long it would take to receive the Maryland Security Interest Filing from the lienholder after you paid it off? 7days? or less or more than 7 days???
@Channida, I wouldn’t expect it in less than 2-4 weeks.
@Clever Dude Thanks a lot for the post.
@Channida For a frame of reference: I paid off my car on May 10th, 2011. My Maryland Notice of Security Interest Filing was signed on June 2, 2011. The envelope was postmarked June 6, 2011. I received it in the mail on June 8th.
Probably an important fact… my lienholder was BB&T.
I am extremely excited that you have posted information on this subject! I am a title clerk at a dealership and specifically deal with customers who trade in vehicles. I would like to add a few things that I believe are extremely important when trading in a vehicle.
First, if you are trading in a vehicle and have not yet paid off your loan, you may arrange a “pay off” with the dealership. This means the dealership will payoff the remaining balance on your loan with, of course, an exception: depending on how much you still owe, the dealership will either eat the expense and pay it off for you or they will add the balance into the amount you are financing/ owe (for cash deals) to create equity for you. In this case, you must provide the dealership with all of your account information as well as a signed form granting the dealership the right to pay off the vehicle (many banks, believe it or not, will NOT let the dealership payoff the car unless there is a signed document from the customer allowing them to payoff the loan). I know it sounds risky to tell you the dealership needs your account information but rest assured – the reason we need this is so that we may contact the bank to verify the exact amount you still owe as many customers tend to “round”. If we send a payoff check for $2000 and you owed $2050 the bank will NOT contact the dealership for the remaining balance. Instead they will let the balance grow and harass our customers instead of calling us – problem: we will never know we did not pay off the full amount owed!!!
Second, if a vehicle is being traded in to a dealership the customer must sign the back of the title as the seller. I cannot tell you how many customers sign as the buyer…the title is in your name! You cannot sell a car to yourself! In cases where the customer has signed incorrectly, the dealership cannot use the title whatsoever so please, if you are afraid of signing incorrectly or are concerned about signing do not sign it at all! Every dealership will have a restricted power of attorney form that you may sign instead. In this case you are granting the dealership to sign the title for you. As a title clerk I can tell you what I do: I will hand print the names of the customers listed on the title and sign next to it with a “POA” after my signature. This means you have allowed me to sign the title for you. The power of attorney form will not allow me to do anything but this for you so again, rest assured, signing this form will not allow me to act for you in any other way! Many customers must sign this because they have titled their trade in another state. Unlike Maryland, out of state titles do not have lien release letters or Security Interest Filing documents. Instead, they send the dealership or customer the title with the lien release portion signed (this is called a “1 part title”) because the title does not come from the bank already signed by you, we must sign for you. (Once the loan is paid in full by the dealership, the title is mailed to us directly – it is not sent to you because since the dealership paid off the loan – we now owe the car which is correct since you have traded it in).
Lastly, the security interest filing (red document) is exactly what it says it is at the top: “THIS IS NOT A TITLE”. PLEASE do not sign the back of this document! Under absolutely no circumstance will anyone trading in a vehicle ever sign the back of this document!!! Think of things this way: When you buy a car and finance through, lets say Suntrust, the title issued to you will have your name at the top portion as the owner and will have Suntrust listed as the “lienholder”. Technically, you have not paid for the vehicle yet since you still owe money to Suntrust. The title, attached to the Security Interest Filing prove that you, and you alone (no more Suntrust) own that vehicle. You must have both documents in order to prove this to anyone (a dealership, Suntrust if they say you still owe money, etc.)
I am sorry for the extremely long post but I wanted to add a few things to help customers understand the documents they sign. In today’s world, I do not blame customers at all for feeling uncomfortable about signing documents so I believe it is important to thoroughly explain the necessity of these documents and at a dealership especially there are so many forms to sign that it is easily to sign documents incorrectly or without full knowledge of what you are agreeing to. I hope this helps!
This was the best most informative post I have ever read, I really appreciate everyones contribution!
I am paying off my car loan next week. I have it with Capital One Auto Loans. I will give some time of reference of when I receive my security interest filing, when I get it. So from my understanding, techincally there is no MVA process that is needed to clear my title. I mean I guess it’s not a requiement by law that I do. Unless there is an advantage to doing so. I looked up the fees in MD, and it’s like $20 plus the time it takes to wait in line, which shouldn’t be too bad if you went to MVA express…
This was the exact question I had. I spoke to my lienholder, Honda financial sevices, and they told me I would have to take my Maryland Notice of Security Interest Filing to MVA to get the full title. I thought I would search for other solutions before heading to MVA and look what I have found out. Thanks alot!! I could have wasted my valueable time at MVA.
My fathers vehicle has been paid off in 2006. The title still has the lien on it so I need a whole new clear title. I bought the car. I have the lien release. It’s a Maryland title. I’m trying to register it to DC. I was told by the dmv to bring the security interest filling document, but we don’t know where it is. It was so looking ago. The finance company on the title is Household Automotive. Household was bought by HSBC. HSBC was bought by santander. So they can’t find the document. SOMEBODY PLEASE HELP. I NEED YOUR ADVICE.