If you have a car loan that you want to get out of and still have payments to make, you can transfer your car loan to another person, with some stipulations. There are some specific criteria that you'll have to keep in mind when you considering moving your auto loan.
But before you transfer your auto loan, consider whether you like the vehicle you are driving. If you do, there are other options such as refinancing, which may allow you to keep the car you are driving while renegotiating the terms of your contract.
Advantages to Transferring your Car Loan
When you transfer your car loan to someone else, you free yourself of any remaining payments so that you no longer have the responsibility of making the payments and you can focus on purchasing a new car under another loan or taking a break from your obligation completely for a while.
Another advantage to moving your car loan terms to another person is that it will improve your credit rating. Remember that your credit rating is based primarily on your income-to-debt ratio. When you free yourself of a car loan and transfer it to someone else, it should raise your credit score since you will no longer have that debt on your credit record.
First, your new owner will have to pass a credit check, and your lender will have to approve them. When you transfer a car loan, you are giving the responsibility to someone else. So you have to make sure the new borrower can carry the payments.
Steps to Transferring a Car Loan to Another Person
If you are trying to sell your car to someone and you also want to transfer the car loan, there are specific steps you need to take to complete this process. So decide whether you want to keep your current car or not. If you don't, then follow the steps below in this post to transfer your car loan.
- Check your loan agreement. Every contract is different. So you first need to find out if you are allowed to transfer your car loan to someone else. Even though it is generally considered okay to transfer loans to someone else, you have to make sure your loan allows for this. Read the fine print or bring in your contract and we will help you make sense of the fine print.
- Vet your potential buyer to make sure they will pass a credit check with your lender. You can do this by asking them how their credit rating is. You may think this is a personal question that they may not want to answer. But when someone is purchasing a car from you, they should not be surprised at this question. Instead of going through a bank, you are helping them set up the terms by transferring your loan to them. Knowing their credit score can help you decide if they are an excellent candidate to move your loan to.
- Contact a car dealership. If you have trouble finding a buyer for your car or your car loan, you can contact a local car dealership to see if they can locate a suitable buyer for you.
- Transfer your car registration papers. You need to transfer the registration papers to the new buyer when you transfer the loan documentation. The DMV and the RTO (Regional Transportation Office) needs to have a copy of the information regarding the current owner of a vehicle so that it can be identified on the network. The RTO officials will transfer the ownership to the new buyer. This process may take up to two weeks and authorities will do a background check during this process before changes the name of the registrant.
- Update insurance. The new buyer who takes on your loan will also have to update their car insurance to report the information on the car they are buying from your lender when they take over your payments. Current coverage is required in every state except Virginia and New Hampshire. But if you live in these states, you may still need to update your information in the DMV.
- The new borrower will have to furnish the following information when requesting a transfer of a loan in their name:ID proof
- Pay any applicable charges. Banks and lenders often charge a fee for the process of transferring your car loan. The fee may be minimal, but it must still be paid to proceed with your car loan transfer.
Why transfer my car loan?
If you are considering transferring your car loan to another person, that's fine. It can usually be done, provided that your car loan allows for this and you can find a buyer for your car loan that can pass the credit check and background check.
If you are not happy with your auto purchase, don't want the current terms of your car loan, or want to find a better deal on a car, you can get out from under your car loan. Once you are free of your old investment, you may choose to look into another car loan to get the car you want.
Who should not transfer their car loan?
You should transfer your loan only if you are unhappy with your current car or loan terms and if you have not paid a huge amount of principal on your loan. If you have already paid out a lot of money on it, you may want to consider going ahead with the loan terms and paying it out to the end. Then you could always sell your car outright without having to worry about the loan once it is paid in full.
Refinancing: Another Option
Another option for your car loan issues is to refinance your current loan. Refinancing involves taking your current car loan and readjusting the terms or the percentages to better fit your budget or unique situation. These personalized refinanced loans may be just what you need if you are not happy with the terms of your current loan or if you want to lower your monthly payments.
Some people use refinancing as an option when they have fallen behind in their payments and need a new option for repaying their current loan. This can also be a good solution and an alternative to transferring a car loan to another buyer.
Who should refinance their auto loan?
If you are having trouble paying your monthly payments, have fallen behind in your current obligation, or need to change the terms of your current auto loan, you may be a good candidate for refinancing your auto loan. You should do this if you like the car you are driving but are experiencing problems paying your loan back.
This type of option gives you a temporary break in payments as you are rearranging the terms of your loan while still allowing you to drive the car you like. If you are not happy with your vehicle, you will want to look into transferring your car loan to another buyer and starting over with a new car loan.
Where to Find a New Car Loan
If you have already transferred your current car loan and you weren't happy with your current agreement, you may want to look into getting a new auto loan. It is important to like the car you drive. Start the new year off right driving the car that you want in 2019.
If you need to know where to start, visit our friendly staff and tell them that you were unhappy with your current car loan and that you are interested in looking into getting a brand new loan. We may even be able to help you transfer your current loan to another person by helping you run the credit checks and other paperwork once you find a buyer.
You can bring the new buyer in with you and sit down with us and we will help you work out the specifics, make the applications, and file all of the paperwork.
The Most Important Thing
The most important thing when it comes to your auto loan is that you are happy with the vehicle you are driving. You should also feel good about the terms of your auto loan and the payments that you make each month. If you are having trouble making the payments or just don't like the arrangement you made before, come in and talk to us. We can help.
If you are reading this online from another location, we can still help by helping you get a new car loan on our website. Simply do a search on our website for a new auto loan and then search our wide catalog of vehicles that we have to choose from.
We have an excellent record of almost 100% of our applicants qualifying for a car loan. We have helped people with poor credit, no credit, and any financial situation to find an auto loan that is perfect for them.
Visit with us anytime or fill out our online form. The beginning of something is always the hardest. But at Valley Auto Loan, we make the entire process easy!
Whether you want to get a new or used car loan for the first time or refinance a current loan, Valley Auto Loan is the place to start.