How does one transfer a Car Loan to another person?
Do you want to sell your car while the Car Loan is still active? In most cases, people that plan to sell their vehicles usually pay the pending loan amount instead of transferring the loan to the next buyer. Read on to know how you can transfer a Car Loan to another person.
A lot of people buy four-wheelers with a Car Loan, but in time the loan liability may seem burdensome and car owners may struggle to carry on with the loan. In such cases, selling the car off and transferring the loan amount is the only option. However, the process of a Car Loan transfer to the next buyer is not as simple as it may seem. Banks may allow you to transfer the loan to a new borrower, provided you meet the requirements. If you are planning to make that decision, here are a few things you should keep in mind while transferring a Car Loan:
Check the Loan Agreement: You must thoroughly review the details of your loan documents. You need to ascertain whether the bank is relaying to you the authority to transfer a Car Loan to another person. If the document says the loan cannot be transferred, then it may be difficult for you to sell the car without paying the entire loan amount
Finding a suitable borrower: The person that the Car Loan is being transferred to must be willing to take full ownership of the vehicle and the loan. Selling a car that has an ongoing loan also decreases the overall cost of the four-wheeler. It is necessary that you do your research on the rates to sell your car at a good price
Checking the borrower’s credibility: The borrower that you’re transferring the loan to must have a good credit score. The new borrower will have to submit relevant documents to the lender to get approval for a Car Loan transfer
Transferring the car registration: Along with the loan documents, you will also need to transfer your car-registration in the name of the new borrower and visit the Regional Transportation Office (RTO) to plan the succession. There are charges applicable on the transfer of a car registration
Submitting documents: In addition, you will also need to submit other necessary documents such as ID proof, address proof, income proof and the Transfer Request form. The paperwork process would vary from bank to bank
Insurance requirements: As an owner of a vehicle, you may be very well be aware of the importance of Car Insurance. While the loan-transfer and the vehicle-registration process is ongoing you will also have to seek consent on the transfer of the insurance policy to the new borrower. This will require you to submit the bank documents to the insurance company so that the changes get implemented
Fees and charges: When you’re transferring the loan, banks may levy a processing fees and transfer fees. The charges vary depending on the remaining loan tenure and the principal. You need to check with your lender and learn about the charges related to the transfer process.
If you are looking to transfer your Car Loan, you should also consider the age of the car and the loan term. Usually, Car Loan repayment tenure is up to <7> years. As a Car Loan borrower if you feel the pinch of a loan, you may opt for a Car Loan Balance Transfer facility. A balance transfer of your Car Loan will help you get a loan at a lower interest rate. Avail refinance on your vehicle with ICICI Bank Car Loans.
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