What happens to my old loan after I trade in my car?

After the deal, the dealer sends the payoff to your lender, usually within a few days to a few weeks. Until you confirm the loan shows a zero balance, keep an eye on it, and consider making any payment that comes due so you don't get a late mark. Once the payoff posts, the lender releases the lien. If the payoff is delayed, contact the dealer with your contract showing they agreed to pay it.