After buying a car, the need arises to transfer an auto loan to another financing firm. Usually the reasons, for transferring the loan, to another bank are interest rates, tenure of the loan, and the payment amount.
Illustrated below are the steps to make the car loan transfer process easier:
1. Review all the documents of the loan to ensure that transferring a loan to another bank is allowed. In case, you do not find what you are looking for, contact the lender.
2. Check the banks and firms that are offering car loan at the rate lower than that has been charged to you. Search online for the lender that offers the facility to transfer the loan. Choose a bank or firm that provides you lowest interest rates.
3. Usually people look for interest rates while searching for a lender, but, there are various other costs that you should check before applying.
4. You will have to submit a letter to existing lender requesting a loan transfer. The bank will issue a letter mentioning the outstanding amount.
5. The letter issued by existing lender needs to be submitted to the new lender. The new lender will then sanction your loan amount to the old lender for the closure of your loan.
6. Once the transaction is over the documents of your car will be handed to the new lender.
Things to Consider:
• It is always good to transfer your loan early as you would have already returned out a large amount.
• Get a statement from your existing lender stating that property documents will be forwarded within a set time frame to avoid disputes on this front.
• Remember that a loan transfer will not be possible if you have been irregular with your loan repayment with your existing lender.