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Car Loan Release Letter for the United States

Car Loan Release Letter Template for United States

A Car Loan Release Letter is a formal document issued by a lender in the United States, confirming that a borrower has fully satisfied their car loan obligations and that the lender releases all claims and interest in the vehicle. This document complies with federal regulations including the Truth in Lending Act and state-specific DMV requirements. It serves as official proof that the lien has been released and enables the borrower to obtain a clean title to their vehicle.

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Car Loan Release Letter

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What is a Car Loan Release Letter?

The Car Loan Release Letter is a crucial document in U.S. automotive financing that marks the successful completion of a car loan agreement. It is issued when a borrower has made all required payments and fulfilled all obligations under the loan agreement. The letter serves multiple purposes: it provides official confirmation of loan satisfaction, releases the lender's security interest in the vehicle, enables the borrower to obtain a clean title, and may be required for various administrative processes with state DMVs. The document must comply with both federal lending regulations and state-specific requirements for lien releases.

What sections should be included in a Car Loan Release Letter?

1. Lender Information: Full legal name and address of the lending institution

2. Borrower Information: Full legal name and address of the borrower

3. Vehicle Information: Vehicle identification number (VIN), make, model, and year

4. Loan Details: Original loan amount, loan number, and date of satisfaction

5. Release Statement: Clear statement that the loan has been satisfied and lien is released

6. Authorization: Authorized signature and title of lender representative

What sections are optional to include in a Car Loan Release Letter?

1. Payment History Summary: Summary of loan payment history, used when required by state law or requested by borrower

2. Credit Reporting Statement: Statement about reporting to credit bureaus, included when specifically requested

3. Title Transfer Instructions: Specific instructions for title transfer, included when state DMV requires specific language

What schedules should be included in a Car Loan Release Letter?

1. Copy of Satisfied Loan Agreement: Copy of original loan agreement marked as satisfied

2. DMV Forms: State-specific DMV forms for lien release, if required

3. Payment Verification: Proof of final payment, if required by state law

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Ƶ

Document Type

Release of Lien

Cost

Free to use
Relevant legal definitions




















Clauses













Industries

Truth in Lending Act (TILA): Federal law requiring clear disclosure of loan terms and conditions, and regulating how financial information must be presented in lending documents

Uniform Commercial Code (UCC) Article 9: Governs secured transactions and the release of security interests in vehicles, providing standardized rules for lien releases across states

State Motor Vehicle Laws: State-specific regulations governing vehicle titles, lien requirements, and specific procedures and timeframes for lien release documentation

Fair Credit Reporting Act (FCRA): Federal law outlining requirements for reporting loan satisfaction to credit bureaus and maintaining accurate credit information

State Consumer Protection Laws: State-specific legislation protecting consumer rights and establishing requirements for loan satisfaction documentation

DMV Regulations: State-specific Department of Motor Vehicles requirements governing lien release documentation and procedures for title transfer after loan satisfaction

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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