Car Loan Transfer Procedure
A car has become a mandate asset for every house in India during recent times. Car manufacturers have come up with different segments of cars to address the vehicle needs of the people. You may look out for an option for car loan transfer when you want to buy a new car by selling an old car or when you want money to fund some emergencies in life. When you think of transferring your car loan, you have two options, one is, modify with the existing lender or seek with the new lender. You may be standing beneficial when you go with the prior option, the latter option will benefit the borrower. Choosing the latter option will fetch several borrowers willing for the loan transfer as it will benefit them at the most.
Modifying with the current lender
This approach will let you contact your current lender and notify them that you want to sell the car and you are looking for loan transfer. You can choose this option when you want to sell the car without repaying the loan. The lenders welcome this offer but, demand a good credit score of the borrower. The entire loan transfer will be a smooth process and you will no longer stay liable to pay for your old car loan.
Approaching new lender
An alternative way for your car loan transfer is to approach a new loan. The new lender will agree to pay off the remaining loan with the new one. Closing your auto loan this way can be considered as prepayment of the loan and you may end up in paying the penalty for the same. This approach will benefit the borrower because the remaining the loan amount is low when compared to the principal. The borrower will be able to own a car less rate. Lower the auto loan lower will be the interest rate and lower will be EMIs too.
Every car owner should adhere to the insurance requirements placed by the lender. You should discuss with the lender about the requirements before making a car loan transfer. You need not worry about the adherence of this insurance policy if you are transferring car loan to someone who is under your guidance. If you are transferring the car loan to a person who is entirely new, you should make sure that the borrowers adhere to the insurance policy while purchasing a car.
When you transfer a car loan, you should make sure you transfer all the documents. You should change the car title on the borrower’s name as per the instructions. The regulations for the same varies from state to state and you should make sure check these regulations while changing the car title.