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When you follow the appropriate steps, you can transfer an automobile loan to another individual swiftly and effortlessly. Just keep in mind that finding a buyer ready to take on your previous loan can take some time and work.
Continue reading to understand how to transfer a car loan and when you should do this. But let’s see whether transferring a car loan is feasible or not.
Is it Possible to Transfer a Car Loan to Someone Else?
Yes, it is possible to transfer a car loan to someone else. However, bear in mind that you will lose both money and time in the process. Our recommendation to you would be to go to a professional while doing this and not do this on your own. Otherwise, the loss could be unmanageable for you.
How to Transfer a Car Loan to Someone Else?
Before going for transfer, make sure you have a person to whom you will transfer. The person must fulfill all the requirements which you fulfilled at the start of the contract. Once you find that person, the next thing is a contract stipulation. That is it can be assumed by someone other than you. This will mean that your loan can be transferred to another individual.
However, keep the other individual prepared for credit score, financial history, and income checking. The loan will be transferred only if the buyer gets approved.
Here are a few options you could take help from when transferring your car loan to another person.
Change the Lender: If you switch lenders, the new lender will extend the credit needed to pay off the rest of the loan balance. Thus, a completely new loan balance and a completely new loan would be issued to the other individual. It is important to mention here that you will be charged some penalty and your credit score might suffer as well.
Take Permission From Your Existing Lender: Instead of changing your lender, you can ask for your lender’s approval. In this, you can inform your current lender that someone else will be paying off the remaining payments of yours. Your current lender will undergo a typical process and grant permission to the other person. One best thing about this option is that it takes less money from you as compared to changing the lender option.
Sell Your Vehicle Privately: This option does not transfer the car loan, but it is a quick way to get rid of car loans and monthly payments. In this, you go to the market or car buyers online and sell them your vehicle. If the value of your car is more or equal to the amount you owe in car debt, you can easily repay it to your lender. Even if your car value is less than what you owe, you can still get some relief by paying multiple payments in one blow.
Pros & Cons of Transferring a Car Loan
There are a few advantages to transferring a car loan to someone else:
- Evading the monthly financial grind
- Possibility to buy a new car
- Improved credit score with faster repayment
- Peace of mind
- What to Be Aware Of
Transferring a car loan to a different person has its own set of disadvantages. Here are a few.
- Finding the right person and getting them approved is difficult
- Positive equity in your car is lost
- Loss of money while transferring
- Loss of time and effort
Does Transferring My Car Loan Hurt My Credit Score?
The general answer to this would be NO! Your credit score should not be affected when you transfer your car loan to someone else. However, if you missed your loan payment in the way, your credit score might get affected.
Loans exist for a reason: to assist consumers in making substantial financial expenditures that their current finances may not be able to pay all at once. However, if your circumstances change, you may find that you no longer want or need your loan. If you’re able to find a willing taker, you’ll need to look into whether your specific sort of loan can be transferred to someone else.
What you need to do is consult with a knowledgeable loan specialist or financial advisor who can tell you whether your loan may be transferred and, if so, walk you through the procedure so that you come out on the other side with the fewest penalties possible.
The Bottom Line
At Lionsgate, we specialize in helping people obtain funding private mortgages for land purchases as well as for other real estate transactions. If you are looking to buy land in Canada, get a mortgage or apply for a loan, leave us a message and we will try to connect you with local realtors and sourcing for financing.
If you found this article helpful, please share it with someone you care about. Also, visit our blog to read similar articles on mortgages.