How do I take over a car loan?
What do I need to do to take over my dad’s car loan? He recently went through a rough patch financially and I know it would make things a lot easier for him if I could take over the loan for him.
It’s great you want to help your dad! That said, most lenders won’t allow you to take over someone else’s car loan without assuming ownership of the vehicle.
If your dad’s lender allows loan assumption, you’ll need to go through an approval process similar to that of applying for a loan. The lender will look at your credit report and your debt-to-income ratio to make sure that you qualify for the loan terms. If you qualify, you’ll sign the loan contract and begin making payments.
If you’re not planning to drive the vehicle, you could simply give the money to your dad to use for loan payments. That way, he could continue to build credit with the loan with your help!
Often, however, it will be much easier and more productive to refinance the loan. Doing so could lower the monthly payments, especially if you become a cosigner on the refinanced loan. If you have good credit, becoming a cosigner could result in better loan terms. It will also help your dad build his credit since he’ll still be on the loan. You’ll also be able to help your dad make payments on the loan if you’d like.
Since you’re helping your dad refinance his loan, help him cut costs on other bills, too! The Jerry app makes it easy to find the lowest rates on car insurance coverage. Just download the app and answer some quick questions. You’ll be able to choose from a comprehensive list of quotes for policies similar to your dad’s current policy. The average user saves $879 per year!
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