Can You Transfer a Car Loan to Someone Else?

You have asked the question, ‘Can you transfer a car loan to someone else?’ The answer is no. There are a lot of reasons why you will not be able to transfer the note to another. One is that the value of the property has changed since you purchased it and took out the note. Another is the financial status of the other person you want to take over the note. This person will have a different credit history, different credit score, and different income and debt than you have. The lender granted the note to you based on terms that you qualified for when you signed the loan. If you want to end your payments on the loan you will need to sell the car to the other person. The other person will have to have the cash or proceeds from his own loan that you will have to use to pay off the note you have on the car before you can transfer the title to the new owner. He can go to your lender or he can go to another, but he must obtain financing for the vehicle independent of the note that you have.

Since you cannot transfer a car loan to someone else you will have to find an individual that wants to buy your vehicle. If the buyer will apply with your lender you may find that the application will be evaluated and approved faster than if the buyer seeks another source of lending. The lender will have the proceeds of the loan and will not have to wait for the transfer from another lending institution. He can apply the proceeds quickly.
At any rate, the loan that you have on the vehicle must be satisfied in full before the lender is required to release the lien against the title of the car. Keep in mind that if the car does not sell for the amount of money that it will take to satisfy the pay off on the loan, you will be responsible for that amount of money. The title to the car will not be released until the amount is paid in full.

Can you transfer a car loan to someone else? No. When you sell the vehicle rather than affect a transfer, the buyer must pay the fees associated with the sale to the state. Depending on the state there may be taxes that are due when the vehicle is purchased. The buyer will have to pay these within a short period of time after buying the car. The tax amount can be rolled over into the loan amount if the lender agrees and the lender will write the check to the state authority responsible for collecting the taxes. You will make a slightly higher payment because the taxes will become a part of the amount that you borrowed on the vehicle. You must register the car with the state and pay all applicable fees associated with obtaining title to the car. There are a lot of states that require the vehicle to pass an inspection of the emission system when the car changes hands.

You can retain title of the car and remain owner of the car and simply add the new owner to the loan that you have on the car. Your lender would have to approve and a new loan would ensue and you will have a refinance note on your car. There will be no requirement to pay state taxes or title transfer fees because the title did not go to another buyer. If you and the buyer both have good credit histories you may be able to get a lower rate of interest than on the original note.

As a general rule the lender will follow industry standards and have a scale that they use to assign an interest rate when you apply for the note. The borrower with the highest credit score and the best credit history will get to take advantage of the lowest rate of interest. Consequently, if you have a poor credit history and a lower credit score you will be given the highest rate of interest or you will be denied the loan. The condition of the car will determine the amount of the loan. Decide carefully before you take out the note on the car because if you get in a bind and ask, ‘Can you transfer a car loan to someone else? The answer is no, you will have to find a buyer for the vehicle.