How to transfer a car loan to another person?

If you have bought an online car loan in UK from a lender and decided to transfer the same loan to another person, then there are certain norms to follow. You can modify the loan with the existing lender, this will be beneficial to you.

So, first, let us understand why this transfer is made.

Basically, a car loan is transferred when you have decided to sell a car that has been taken on loan. So, if you are still paying the loan for your car, but decided to sell it, then you can talk to your lender and transfer the loan and the car to the new borrower who is taking.

All you must do is just keep all the documents intact and make sure the whole process goes smoothly.

1. Directly modifying: In this, all you must do is just contact your lender and inform him about the selling of your car and transferring the loan. Then the lender will check on the creditworthy of the new borrower, in case if he wants to continue the loan with the same lender. So, the new borrower should have a better credit score, which will prove his credibility. This will make the entire loan transfer process easier and the whole loan will be transferred to the new borrower, where he will be further responsible to pay the remaining loan amount.
2. Seeking a new lender: If you want to seek a new lender rather than closing it with the already existing one, you can also do that. But, with this process, you won't be benefiting anything rather the new borrower will benefit wherein the sum remaining will be smaller than the initial principal amount. So, a smaller amount means, lower monthly payments, interest rates are lesser, etc.
3. Changing car title: It is not just transferring the loan; it is transferring the whole car documents too. The documents of the car and the title of the car can be changed either by going with the instructions mentioned on the agreement or the lender will do that for you.
4. Meeting the requirements of insurance: In this process, you need to see if the new borrower meets the requirements of the insurance that is placed by the lender. If the new borrower is under the age of 25 or is a new driver, then the insurance payments will generally be higher. Suppose if the same loan is being transferred to someone who is under your insurance plan, like a family member. Then you don’t have to worry about the new borrower meeting the insurance requirement plan.

So, there are two ways that you can choose while transferring a loan to another person. You can either modify it with your existing lender and you can choose to go with a new lender. If you are modifying the loan with your existing lender, then you will present the least penalties. But, if you are going for a new lender, then you will end up paying more. So, all this will depend on your priorities to choose from

For more info visit: https://www.fleetquid.co.uk/loans/car-loans

Online car loan transfer is easy if all the practices are followed in the right way. Look for the process that doesn’t bring loss to both parties.