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How can I take over car loan payments for someone else?

My friend recently lost his job and can't afford his car payment. Trying to help him out, I offered to take over his car loan. How can I take over car loan payments for someone else?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You have several options to consider for taking over a car loan for someone else:
Transfer the car loan: Yes, you can
transfer a car loan
to someone else. But to do this, they also have to transfer ownership of the vehicle to you—and they may not want to give up ownership of their vehicle.
Refinance the car: The person could
refinance the car
on their own or by adding you as a cosigner. This could result in a lower monthly payment. But remember that you would assume financial liability for the loan by co-signing.
Provide money for the payments: You could also give the person some money to pay their existing car loan each month. Keep track of what you pay and ask that they pay you back. To make it official, you could have them sign a promissory note, which is essentially a legally binding IOU.
Sell the car: The last option is for your friend to
sell the car
. But again, they may not be willing to do this.
Regardless of which option you choose, make sure that your expectations of each other are clear and that you’re comfortable with any financial responsibilities you do (or don’t) decide to take on.
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