Information on car loan transfer
Could I just switch cars but keep the same loan and apply the remaining balance of my old loan to the new car?
I have a car loan thru my bank..the amount that i have left to pay is about 16,000 the trade in value for my car is 13,000 if i get a new car for about 28,000 and used my car as a trade in making the new car about 15,000 could i just switch the cars but keep the same loan and apply the remaining balance of my loan to the new car?..is this possible and if so would there be any penialties or anything negative like that or what would normally happen in this case..
In order to accomplish what you are trying to do, you would most likely have to work with both, the lender of your existing vehicle as well as the one who will be funding your new loan. When you trade in your car, the person or entity buying the car will be paying off the existing loan. In case if the sale or trade in value is below the amount of your existing loan, as it is in your case, the negative equity that you have will be added to your new loan. So in your case the $3000 deficit would be added on top of the $15,000 that you are borrowing for your new car. Here is the math in simple terms:
Cost of new car $28000
Less trade in value - $13000
Amount of new loan $15000
Add deficit for old loan + $ 3000
New loan total = $18000
Net net, you will be closing the existing loan for your old car and opening a new one for your new car. As far as the penalties, prepayment terms vary from lender to lender so you will need to call your existing loan provider to get details on the prepayment penalties if any. In case there is a penalty then you will have to factor in that cost as well to your new loan. If you are looking for new loan offers Bills.com makes it easy to get quotes from different lenders. If you fill in your information at https://www.bills.com/autoloan/loan/ matching lenders will then contact you. You can then discuss your particular situation with them and see if they are willing to work with you. Make sure you shop around to find the lowest rate.
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