Sometimes a car can become too much for us to handle or we just don’t want it anymore. The only problem is that you still owe money on a loan for it through a bank or lender. You know that it could potentially be worth less than what you owe, but you don’t want to be left paying off a car that you wouldn’t even own anymore. What if there was a way to fix that? TFC Title Loans is here to teach you just how to transfer a car loan to another person.
TFC has been one of the leading auto title loan lenders for more than 20 years. Our customers have trusted us with all their financial issues through Car Title Loans with us. When it comes to cars and car loans, we believe we are some of the best people to educate you on all your options. Get started with transferring a loan by following the advice below.
Before you start the process with your buyer, check with your bank to ensure you can transfer the loan. If you can’t find anything in your agreement documents, contact your bank or lender to check with them. If the transfer is not authorized under your agreement, then it’s going to be near impossible to switch the loan.
If you’ve verified that you can transfer the loan, then check if your bank or lender charges any levy fees or transfer charges. Being prepared for those is important because you will have to decide if you will make your buyer reimburse you for them or if you will pay for it.
Modifying the loan directly through your lender is one of the options you have for transferring. You will have to contact your lender to let them know you are selling your car, and that you want the loan to go with the car. This is actually a common process when you trade in a car to a dealership.
In order for the loan to be transferred, you and the new owner will need to prove they are credit worthy. You’ll have a higher chance of them being credit worthy if their credit is equal to or greater than yours. If your new borrower does not have a good credit score, you might need to move on to the next potential owner.
Once you’ve proved they’re credit worthy, the entire loan will be transferred. It will be like you never borrowed the loan. The new borrower will receive the good standing of the loan, but will be on the hook for the remainder of the balance.
When trying to transfer the loan to a new borrower with a new lender, the new lender will usually pay off the remainder of your loan and issue the new loan with the new borrower. This could be a pricier or damaging way to transfer the loan, depending on your original lender.
Again, make sure you check the agreements of your loan. If you have any prepayment penalties established through your agreement, transferring the loan with a new lender could count as a prepayment with the existing lender. This could lead to credit score problems for you or financial penalties.
Luckily for the buyer, this path choice could benefit them. Because their new loan sum through a different lender is smaller than the initial principal of the car, this could give them lower payments and lower interest rates than it would’ve with the original lender.
To transfer the title of the car, you will have to go to the DMV to acquire any of the documents. These are some of the steps you may need to go through when transferring the title:
If your borrower decides to establish a car title loan and is not satisfied, send them over to TFC Title Loans! We can offer them a possibility to lower their monthly payment and/or obtain some extra cash after getting their new car. The process is simple and quick. Choose TFC Title Loans and save yourself some money today!