Can a bank hold a title on a paid off vehicle because of a $1,500 credit card balance?
Loan contracts include security agreements. They define the collateral that secures the loan. You will have had this with your car loan and it may be on the credit card agreement as well. Security agreements include a cross-collateralization clause. It may also be referred to as a spreader clause or a dragnet clause. It will say that collateral securing other loans is also deemed to secure this one.
It is very possible that if you have this in your credit card agreement, your car title can be held. This is not usually a problem if the payments are current and the history indicates payments were and will be made on time. If you are having issues, speak with a lender and ask him why the title is being held and under what conditions it will be released.
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