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If you want to buy a car, it is next to impossible for you to produce the money needed to buy the vehicle right then and there. To be able to afford the purchase, you will need to take out a car loan to help you with the financing. While car dealers offer specific financing programs for potential car owners, you always have the choice to go for independent financing. All you need to do is sign up for a personal loan.
Things to consider about personal car loans
When getting a personal loan to purchase a car, all you need to do is figure out how much you need to make the purchase. You will then apply for a loan to a lender and once approved, you pay the amount to the dealer, you take home the car, and you then start paying off the loan to the lender who you got it from.
One of the best things about getting a car loan through a personal loan is that the funds do not have to be solely used for buying a car. Since it is a personal loan, the borrower has considerable freedom on how he will use it.
How to qualify
Just like any personal loan, you’ll need to meet the basic legibility requirements that lenders have set in order to be granted approval. From having the necessary income to having the necessary credit score, it is best that you find out what lenders require first before ending an application. The loan can be secured or unsecured. Generally, unsecured personal car loans can be a bit expensive interest-wise. If you will choose to secure it, you may be able to borrow more and you may get significantly competitive interest rates.
You’re advised to shop around too and to compare rates. Do see to it that you will ask for soft quotes when shopping so this isn’t going to end up causing a dent on your credit score.
So you have taken out a car loan but now find yourself in a situation where you do not really wish to go through with the agreement anymore. You know of somebody who may be interested in taking on the loan instead and you’re wondering if this is possible.
Is it Possible to Transfer Car Loans?
It is important to understand that a car loan is different from a car finance. This is what you get from the actual dealers which details the agreement involved in the vehicle purchase. Most of the time, this would include you making a down payment and then making monthly instalments. The car will finally be yours the moment that you have successfully paid it off.
A car loan, meanwhile, is more like a personal loan. This means that you’re borrowing money from a lending institution based on your credit history and credit score, as well as on the amount of income that you are earning. It could be secured or unsecured. If secured, it will usually mean that the vehicle you’re buying is used as collateral.
If you’re wondering whether it is possible to transfer your car loan to somebody else, the plain answer is no. It is a personal loan, after all. Personal loans are approved by lenders based on your circumstances as a borrower. It is based on hard credit checks as well as the details contained in your credit history. These are requirements that could not be transferred to another person. Which is why a car loan is non-transferrable.
What You Need To Know About Car Loans
Also, if another person wants to get a car loan, then he will have to meet the necessary eligibility requirements and should qualify through his own means. What you can do is first pay off the loan and then sell the car if you no longer need it to recoup the costs. Just remember that you cannot sell the car while there is still a loan attached to it.