A title-holding state is one where the lienholder (your lender) keeps the title until you've paid off the auto loan. You get the title sent to you once you've finished the loan in this case.

Who holds the title when there is a lien?

A lien holder is the lender that holds the lien. A lienholder may be leasing a car to you while collecting interest, or they gave you money to purchase the vehicle. If you are financing your car through a bank, private lender, or dealership, they are the lienholder.

Do lienholder has title?

Car liens and titles

When you borrow money for a car, it's common for your lienholder to keep the title, which is the legal ownership document for your car, explains Edmunds.com. The lienholder's name may also be printed on the car title, as legal reassurance that you can't sell the car until it's paid off.