5 Steps To Transfer Your Car Loan To Another Bank

If you have an ongoing car loan and want to lower your monthly payments, the best option is to try refinancing it. Usually, banks offer competitive rates for transferring. If you’ve received such an offer, it’s in your best interest to consider the benefits.

The process for transferring a loan may vary by bank. That said, there are some common things that you need to do irrespective of the establishment you’re transferring the loan to. Read on to learn how to transfer a car loan to another bank.

Get An Estimated Value Of Your Car

Do your research beforehand to find out whether you can transfer your current car loan to another bank. Additionally, you’ll need to find out the interest rates, fees, and other factors that can impact your decision.

Gather all the information about your car from your current lender. This information includes your auto loan’s tenure, interest rate, and so forth. You’ll then need to compare this with other lenders to see if transferring your loan is worth it. Moreover, transferring it after one year is the best option since this will help you save a substantial amount of interest. 

Review The Car’s Title And Other Documents       

To apply for a loan transfer, you’ll be required to submit your documents on the vehicle. Check with the dealer or the finance company that you have all the necessary paperwork. Submit all your KYC documents to the bank you’re transferring the loan to. 

The title of the car is its birth certificate. This information is required to be accurate. Make sure to get a copy of your title from your current lender. You might need it to make changes to it when transferring your auto loan to another lender.

Gather Quotes From Banks

The process of transferring a car loan might differ from one institution to another. Check with different establishments to determine the best terms and interest rates you can get as compared to your current loan. In addition, search for better loan features and lower fees that are associated with your loan. 

You’ll also want to check for better repayment terms. By changing to a different bank, you should get an overall reduction in your car loan cost. 

Complete The Application

Based on the information you submit, most of the loan companies will either approve or reject your loan. The eligibility criteria for transferring your auto loan balance will vary from lender to lender. You should keep your current repayment record at a good level for at least nine months for the vehicle that you own. Attain consent from your bank before opting to transfer your auto loan. 

Sign The Paperwork

Once you’re done with the application, sign the documents for the lender. The new bank will transfer the credit of the remaining loan amount to your account. This will help to clear your previous loan completely. 

The bank can even write a check favoring the previous lender or it can coordinate with the previous institution to clear your loan. Finally, contact your insurance company to make the necessary changes for the payee.

Bottom Line

Transferring your auto loan to a new bank could possibly reduce the overall loan expenses, which saves you money in the long run. Just remember to gather as much information before opting for a loan transfer so that you don’t fall into a worse condition than you were before the transfer.