Things You Should Check Before Transferring The Car Loan

by Vinaya HS on March 25, 2017

in Finance

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Buying a car is one of the biggest decisions that one takes in one’s lifetime. In most cases, buyers apply for a car loan through credit companies or banks. However, due to circumstances or any other unavoidable situation, if you don’t want to continue with the car loan, you can always look at transferring the car loan. However, before you take this step, it is important to check a few things. Even if you have applied for a car loan online, you just need to keep all the documents handy, while making the transfer.

Transferable Loan

Even before you zero down on this idea of transferring the car loan, it is important to understand from your leasing company whether the loan can be transferred in the first place or not.

In order to understand the transfer conditions, you first need to understand whether you have leased the car or have taken an auto loan. In the case of leasing, the transfer procedure is fairly simple and easy process. However, if you have taken an auto loan, the process isn’t that simple.

You first need to understand your loan agreement. There will be options in the agreement that cater to selling off your car and paying the remaining loan amount that you owe. You might find an agreement where you can trade the current car for another model and the loan will be adjusted accordingly.

One of the better options to consider is to discuss your idea of selling your car to a new owner with the credit company. They can also help you with some legal help that is needed to complete this entire process. With the credit company helping you out with all the dealings, it is less likely that you will need to do a background check or check the credibility of the buyer, as the credit company will take care of all these checks. Hence, you are saved from fraudsters and cheaters and will be sure of receiving your money on time.

You can ask the new owner to take a loan to buy the car from you, and in turn, the money that he pays you can be used to pay off the existing auto loan that you have. You are in turn now, transferring the existing loan to the new owner, alongside the outstanding payments. You also need to make sure the insurance of the car is also transferred to the new owner. However, check all the documentation before you finally transfer the insurance of the car. Also, to be on a safer side, you can formally inform the insurance company that you no longer possess the ownership of the car.

Talking to the experts

There are chances that if you set out to look for a new owner, all by yourself, then you might take a little longer to find a suitable buyer. However, if you don’t want to wait that long or aren’t looking to put in so many efforts to find a suitable buyer, then you might want to consider talking to the experts.

There are a lot of reputed companies in the market that connects sellers with buyers who are willing to buy out a car on loan from the existing owners. You can search for such car loan swap companies and take care of the entire legal process as well. You just need to check the fees that these companies ask for, and weigh if it is worth getting a company involved for the said costs. With a company involved, you are less likely to come across fraudsters.

You can also list your loan offer on online car portals, instead of hiring an expert to do the same. If you wish to go for this option, you will have to deal with the negotiations and the other work, all by yourself. Also, keep in mind to check the background of the potential buyer, before finalizing the deal.

Though it is a fairly less complicated process to transfer the car loan, you need to thoroughly check the buyer’s profile and also make sure to check all the documents before finalizing the deal.

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