Car Loans are readily available in the market – the moment you finalize your car, you would find a financer there and then in the showroom. Also borrowing a car loan makes it convenient for anyone to buy a car and repay in small repayment options. Some people sell of their car quite often to match the new trending vehicle, there can be many reasons as to why you want to sell your car, however if you have purchased your car by borrowing car loan through any bank or any non banking financial organization you need to know how you can get away with your car loan when you sell it to the new owner of the car. Let us first understand the procedure for transferring car loan:
Scrutinize your Loan Agreement: You need to check your loan agreement to know if you have a clause in your agreement that allows you to transfer your loan to other person. You may be required to contact the bank if you do not find such clause n your loan agreement to get a clarity regarding car loan transfer to other person.
Find out a suitable borrower: You need to find a borrower who will be eligible to get a car loan transfer and would like t buy your car. There are various used car outlets these days that will ease the process of fetching a new buyer. However if you are able to sell your car directly to the buyer you can make the most out of it. There are various online portals such as olx.com, quickr.com where you can post an advertisement and get a buyer to sell your car.
Check out the borrower’s credibility: The buyer if interested in buying your vehicle should have a credit standing like you or better than you to apply for a car loan transfer. He should hold a good credit history and Credit score. The new borrower will be required to submit his KYC to the bank.
Checkout various car loan dealers: If you do not offer a good car deal the buyer may not be interested in buying your car. So check the rates at which others are selling their car of the same model. You can take it to an evaluator who can also assess the price of your car after calculating depreciation cost. It is easier to find a buyer through a car dealer than to go on a one on one hunt.
Transfer the Car Registration in the name of New Buyer: It is important for you to transfer the registration of the car in the name of the new buyer. It can be done by visiting the nearest RTO – Regional Transportation office. Once you have submitted your application and deposited the fee the process will take around 2 weeks for the actual transfer to take place.
Insurance Requirements: The borrower also needs to meet the insurance requirements for transferring insurance policy to the borrower. You should receive a confirmation on the transfer of insurance policy from the policy provider. The insurance documents need to be submitted to the bank so that you are not charged on the premiums you have paid and the new owner pays the insurance premium.
The new borrower will be required to submit the documents as mentioned below:
• A form for car loan transfer
• Identity Proof
• Address Proof
• Income ProofThe banks may charge a processing fee for the loan transfer depending on the loan tenure and the outstanding amount payable to the bank.
Quick TIPS for a successful car loan transfer:
• Check with your bank for approval of car loan transfer before you step into the process
• Sell car to someone with known credentials or contact dealers who are into reselling of car to find the right borrower.
• Check with RTO and insurance provider only if you have consent from your lender to sell your vehicle.
• Do ensure that the ownership of the vehicle has been transferred successfully
• Ensure that your insurance policy has been successfully transferred
• Ensure that there is no damage to the car until you finally handover the car to the new borrower, as it can reduce the cost of the vehicle.: Loans