If you want to sell your car but are stuck because the car loan repayment is still due, this article is for you. You will be relieved to know that you have the option to transfer vehicle loans, too. The process will make the buyer of the car responsible for repaying the remaining amount.
The major benefit of transferring your loan is that you can stop worrying about the equated monthly installments (EMIs) as soon as the buyer takes over the car. So, when you apply for a car loan in the first place, ensure that your lender offers this option.
Read on to learn about all the things you must keep in mind before transferring a vehicle loan to another person.
- Read the loan agreement carefully
As already mentioned above, your lender must allow third-party transfers. You must read the loan agreement carefully to understand the rules and regulations. If the transfer facility is not stated in the document, contact your lender directly to get all the details about this option.
- Check the buyer’s credibility
Your lender will check the car loan eligibility of the new borrower, too. So, before you decide who the new owner of your car should be, it is advisable to check if they meet the eligibility criteria. They must have a good credit score, a regular source of income, and all the required documents. It is important to ensure the buyer is credible before selling your car.
- Transfer the registration certificate
The lenders always check if the car is in the new user’s name before accepting to transfer the loan. So, to begin with, you must visit the Regional Transportation Office (RTO) and complete the paperwork. Once the car is registered to the new owner, the loan transfer process can start.
- Transfer the insurance policy
Transferring the car finance is not enough until you hand over the insurance policy of the vehicle to the buyer, too. Unless you transfer the insurance policy, paying the EMIs will continue to be your responsibility. So, you must submit copies of the updated car registration and loan documents to your insurer. If everything is in order, the insurance company will transfer the policy to the new owner.
To ensure hassle-free auto loan transfer, it is important to avail of finance from a reliable lender. Mahindra Finance offers an easy loan application process, minimal documentation requirements, quick processing, and many other benefits to make the procedure hassle-free. Visit their website today to apply for a car loan online.