Let’s know about transfer of car loan. How long does it take for the loan to get transferred? Here are the factors involved in transfer of car loan.
1. Your car loan agreement
Transfer of your car loan is based on your loan agreement paper it should clearly specify that you can transfer your existing loan to someone else. If you are facing any problem regarding your car loan agreement, ask from your bank representative for clarity on the transfer process.
Searching for a new borrower
You can contact with a car dealer in case if you are not getting new borrower for your car loan. Dealer’s might have a contact who is interested in purchasing a second hand vehicle and have capability to take on the loan. Most important think you should keep in mind while searching for a new borrower is that, he/she should have a strong source of income and their history from bank is clear, one should not be like defaulter.
After this process, if you found new borrower then visit your bank and complete the next process like, ask for documents needed in car loan transfer. New borrower need to submit their identity, address and income proof along with a form, requesting to transfer your loan to borrower’s name.
Realignment the car registration
Next step in transferring the car loan is, to visit your nearest RTO office and change the registration of car. Submit documents having the details of new borrower and from RTO officials to transfer car to the new owner’s name. Before transferring the car registration, bank authorities will go for background verification. May be you need to pay some charges for the vehicle registration transfer process. Within up to two weeks this process will complete.
About car insurance
You need to ensure that the new borrower meets the insurance requirements as well. Check with your car insurance company and they will guide you through the terms and conditions. You need to submit the bank documents to the insurance agency so that they can make the changes accordingly and you don’t end up paying extra premiums. Your Car Insurance premiums also need to be taken care of by the new borrower.
5. Transfer fees
Transfer fee and processing fees may be charged by some banks. This will depend upon the time period and amount of the loan. Clearly discuss the loan transfer charges with the new borrower and check with your lending bank about different charges involved.
An important thing to keep in mind, do not approach the RTO office or your insurance company unless the lending bank has approved the loan transfer process and issued the necessary documents. Since you were the primary applicant at the bank, you will be held responsible if there’s any damage to the car during the process of transferring the loan.
So, these are the important factors you must keep in mind while transferring car loan. Clear yourself by all these points before going to transfer car loan to borrower.