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How do you transfer a car loan to someone else?

What are the steps to transfer a car loan? I’m leaving New York and moving back home to live with my mom in Texas. She recently had surgery for her breast cancer. Since I don’t plan to bring my car with me, but I haven't paid off the loan, my friend offered to take over my loan.

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Phoebe Mah · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
You’re so lucky to have a friend who is willing to take over your loan! To transfer a car loan to someone else, you will need to:
  • Step 1: Contact your lender to go over your loan agreement with you. Before you transfer the loan, you need to make sure it is a possibility, as some lenders do not allow loan transfers.
  • Step 2: Use free pricing guides to calculate your vehicle’s worth. Try
    Kelley Bluebook
    or Edmunds.
  • Step 3: Open a new loan. Your friend will need to qualify and apply for a loan with your lender. To streamline the process, ask your lender what documents they need from your friend to transfer the loan. Your lender may charge you processing and transfer fees for changing the new loan borrower.
  • Step 4: Transfer ownership of the vehicle. To complete the process of transferring the loan, you will need to also
    transfer the car title
    to your friend.
  • Step 5: Contact your insurance company. You’ll want to cancel your insurance policy if you aren’t planning to insure another vehicle immediately. You can also let them know you’re moving out of state.
If your lender doesn’t allow you to transfer the loan, another option is for your friend to refinance the loan, or you can sell it to pay off your remaining loan balance.
Should none of these be viable options, consider taking your car with you and refinancing the loan yourself. On average, car owners pay $85 less every month by refinancing their auto loans. See if refinancing will save you money with the
Jerry
app.
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