How to Transfer a Car Loan to Another Person

You can't simply transfer your loan to another person. Instead, the person who wants to take over your car payments must either apply for your loan's payoff amount alone or with you as a cosigner if he can't obtain approval. Lenders base loan interest rates and terms on individual credit history, income and debt. Also, most states require that a new owner pay taxes on a vehicle purchase. The person to whom you want to transfer your car payments may apply to your current lender or to another lender of his choice. You must satisfy your current car loan to transfer vehicle ownership.

Instructions

1

Call your lender to obtain your loan's payoff amount. Ask for the loan's per-diem, which is the cost of interest added daily to your payoff and are charges you must pay to transfer ownership. Unless you pay a zero-percent interest rate, expect your payoff amount to change every day.

2

Ask your lender to describe its payoff process. Find out whether you have to go to your lender to make your payment or whether you must submit funds by mail. To have your buyer pay your lender directly, note your account with a lending representative to allow your buyer to obtain payoff information and make payment.

3

Provide your buyer with the loan's payoff amount. Your buyer can apply to the same lender to simplify the transfer process or apply to a lender of his choice. Provide the buyer with your lender's phone number, your account number and your vehicle information, such as year, make, model and vehicle identification number (VIN).

4

Wait for your buyer to complete her payment to your lender if she applied for a loan elsewhere or, if she applied to your lender, wait for your lender to complete the loan transfer process. Sign your vehicle's title or ownership release paperwork, which varies depending on your state and lender's requirements. If your lender mails you the paperwork, sign and send back your paperwork promptly.

5

Take your license plates off of your vehicle before giving the vehicle to the new owner. Cancel your insurance policy quickly to avoid paying extra insurance costs. Return your plates to a local motor vehicles office if your state requires it.