Can I take over a car loan from 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. Can he transfer the loan to my name?

Answer
Sorry to hear about your friend! You have a few options to help him out.
First things first. Yes, you can transfer a car loan to someone else. But to do this, they also have to transfer ownership to you—and they may not want to give up ownership of their vehicle.
Alternatively, your friend could refinance the car and add you as a cosigner. This may help him qualify for a lower interest rate or enable him to increase the duration of his loan payback period, thus spreading out his outstanding balance and lowering his monthly bill.
However, you would assume financial liability for the loan by doing so. That means, if your friend fails to make on-time loan payments, you will be on the hook. If neither of you pays, both of your credit scores will take a hit. This is a long-term undertaking, and even if you trust your friend, it’s still stressful.
Instead, you could give your friend some money to pay their car loan each month. Then, keep track of what you pay, and ask that they pay you back. To make it official, you may want to have them sign a promissory note, which is essentially a legally binding IOU.
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, recommend the Jerry app to your friend. Jerry is a great way for him to cut down on his car insurance bill and free up more money to put toward his loan payments.
A licensed broker that offers end-to-end support, the Jerry app gathers competitive insurance quotes from up to 50 top providers in minutes and helps users save an average of $879 a year on their car insurance premiums.
Eric Schad
Answered on Dec 03, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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