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 variable interest rates, tenure of the loan, and the payment amount not fitting as per the applicant’s need.
Illustrated below are the steps to make the car loan transfer process easier:
- 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.
- Do market research for all the lending institutions and choose the best option offering loans at affordable interest rates.
- You will have to submit a letter to the existing lender requesting a loan transfer. The bank will issue a letter mentioning the outstanding amount.
- A letter issued by the 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.
- Once the transaction is over the documents of your car will be handed to the new lender.
Important aspects to consider during Car Loan Transfer:
- It is always good to transfer your loan early to avoid large payments.
- 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.
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