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    Can You Hand Over Your Car Loan To Somebody Else?

    A lot of borrowers think that they can use a friend or a relative’s help to pay off the pending car loan.

    Still, a common question that arises is whether someone else can take over your pending loan payments.

    The simple answer to this is no. 

    As per Philip Reed, the Senior Consumer Advice Editor of, most lenders don’t approve loan transfers.

    Even if you wish to sell the car, you’ll need to inform the lender, and this in turn will lead to initiation of a new loan account in the name of the new owner.

    Why It's Not Done

    One possible way to get out of this situation is to consider the help of a family member or friend for handling the payments for some time until you get back on track.

    However, if you are looking for a third-party to take over the loan payments, there are various options to consider. 

    First, you need to loop in the lender when trying to sell a car with an outstanding loan.

    In this case, the lender will run a credit check on the prospective buyer to ensure they can make the remaining payments, which in turn initiates a new loan account.

    In any case, the new buyer has to undergo the same required steps for fresh loan approval in their name.

    The Steps To Do It Properly

    If you’re ready to hand over the car along with the pending loan to someone, there is a specific process that needs to be followed to avoid any issues in the future.

    Again, before starting the process, make sure you go through the fine print of the loan agreement without fail.

    Find Out The Other Person's Credit Score

    Before starting with the process of transferring the car loan to someone else, or even before getting in touch with the financial institution, checking out the credit score of the individual is a crucial step that shouldn’t be avoided. 

    A credit score is an essential factor used by the lenders to determine the creditworthiness and financial risks involved.

    If the new buyer has a low rating, it’ll be difficult for you to convince the lender to approve the deal. The median FICO score for quick approvals is 711.

    Anything above it ensures that the lender will have fewer concerns with respect to approving your request.

    We recommend that you speak with the interested buyer and review their credit score beforehand so you don’t run into unnecessary troubles when trying to sell the car and transferring the loan.

    Contact Your Lender

    Apart from learning about the credit score, there are other essential things you need to explore before moving ahead with the transfer. 

    The next step in the process is getting in touch with the lender. The individual who is currently holding the car loan should get in touch with the financial institution or the bank before taking any further steps.

    When your existing car loan is secured by the car itself, the title of the car belongs to the lender until you pay off the debt; hence, you can’t sell or transfer the ownership without prior approval and permission.

    When contacting the bank or financial institution, a borrower should get all the details regarding car loan transfer policies as well as the vehicle’s title transfer requirements.

    This will help determine whether your contract allows you to transfer the car loan or not. 

    Once Approved, Sign The Paperwork

    If all the eligibility criteria and requirements have been met, the lenders will assist you with the car loan transfer.

    The process will take time, with the period often ranging from a day to a few weeks. 

    When the loan transfer agreement is approved, you’ll need to sign over the car’s title and lien.

    Apart from this, documentation will also include papers for removing the vehicle from an auto insurance policy.

    While signing papers like registration, transfer policies, and title transfer policies, you might also need to get in touch with the DMV for further assistance. 

    Furthermore, the new car loan owner must get the car insured per the applicable policies and laws in their state of residence. 


    It is better not to look for car loan transfers as there are multiple risks attached to it.

    The new owner might provide you with bundles of unpaid toll bills or parking tickets that would be still on your name. 

    Instead of transferring the car loan, you may consider asking a friend or family member to help manage your car loan payments until you have built a stronger financial position.

    Alternatively, you can also consider refinancing the car loan to obtain better rates and more affordable payments.