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Car Loan Balance Transfer - How to Transfer a Car Loan
2 mins Read | 3 Years 5 Months Ago
Do you want to sell your car while the Car Loan is still active? In most cases, people who 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.
What is a Car Loan Transfer?
Many people use Auto Loans to purchase four-wheelers, but over time, the loan obligation may seem challenging, making it difficult for the owners of the vehicles to make loan payments. The only course of action is to sell the car and transfer the loan balance. But it might not be that easy to transfer a car loan to a new buyer. If you fulfil the conditions, banks could let you transfer the loan to another borrower.
You can transfer the remaining amount of your existing Auto Loan from one lender to another via a Car Loan Transfer. This is often done to take advantage of lower interest rates, better terms on the loan or better customer support offered by the new lender. The new lender pays off your existing loan and issues a new one with the altered terms. This can lower the interest rates and help manage your loan more effectively.
Things to keep in mind while transferring a Car Loan
These are the things to keep in mind when transferring your Car Loan:
- Check the Loan Agreement: You must thoroughly review the details of your loan documents. You need to ascertain whether the bank is giving 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 its overall cost. It is necessary to 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 a car registration transfer.
- 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 aware of the importance of Car Insurance. While the loan transfer and the vehicle registration process areongoing, 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 are transferring a loan, banks may levy a processing fee and transfer fee. 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.
How to transfer a Car Loan to another person
Here are various processes involved in transferring an Auto Loan to another person:
- The conditions of the transfer must first be approved by both parties
- Subsequently, the new borrower must fulfil the qualifying requirements and apply for a Vehicle Loan with the bank
- The bank will transfer the loan to the new borrower once it has been approved
- Future payments and the remaining loan debt will be borne by the new borrower. The car's title should be amended to reflect the new ownership and both parties should make sure all documentation is completed.
Conclusion
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 car loan interest rate. Avail refinance on your vehicle with ICICI Bank Car Loans.
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