- Review your options if your auto loan is sold to a new lender.
- Understand that the original terms of your loan remain in place with the new lender.
- Consider refinancing if you do not want to work with the new lender.
My car loan was sold to a new lender without my permission. Is that legal?
I have an auto loan with Citifinancial. Today I received a phone call from Santander Consumer USA. They informed me that they have purchased Citifinancial Auto and have taken over all existing loans. I was then informed that I need to sign a new loan agreement. I knew nothing of this supposed buy-out and refused to give any personal information over the phone. After some research I discovered that Santander Consumer USA in fact HAS purchased Citifinancial Auto. The fact that Citifinancial never informed me that my note was being sold and this new company that I have never heard of has my personal information and is requesting that I modify my existing auto loan to fit their needs DOES NOT sit well with me. This whole thing has an illegal feel to it...unethical at the very least. I did not agree to do business with Santander. Can they do this? What are my options?
Santander Banco, one of Spain's and the world's largest banks, purchased a significant portion of Citigroup's auto loan portfolio. Santander did not buy all of Citi's auto loans, but your loan is apparently one in the portfolio it did buy.
Normally, when a loan is bought, the original servicer notifies the borrower as a matter of common courtesy. It tells you the loan was sold, who your new lender is, and where you will now be sending payments. In your case, it is understandable you were a taken aback by being contacted out of the blue by a party you have never heard of. After all, who in the US outside of the banking business has ever heard of Santander? Still, Citi and Santander's rude behavior does not mean anything improper occurred.
It was not illegal for Citi to sell your loan. The terms of your loan did not change when Citi assigned or sold the loan the Santander. Santander assumed all terms and conditions of your Citi loan, and it would be illegal for Santander to change your interest rate or the monthly payment required unilaterally. You stated the loan was modified, but I am not clear what you meant by that, and which terms or conditions changed.
Customarily, when a new creditor assumes a loan, it does not ask the debtor to sign a new or agreement. One of the reasons it is buying a loan is because the loan's history, risks, and expected return are known or easy to project. It baffles me Santander would risk losing you (and presumably other customers) by asking you to sign new loan agreements, which will almost certainly prompt many customers to shop around for better rates and terms.
What I am about to write is purely speculation, but perhaps the terms of your Citi loan are such that Santander believes it cannot make money on your loan, and would not mind losing you if you take your business elsewhere.
If you do not wish to do business with Santander, refinance your vehicle loan. Refinancing may not make sense if you are already years into the loan, because you will have paid off most of the interest on the loan at that time.
Alternatively, refuse to sign Santander's agreement. You are under no obligation to say yes to Santander's request to accept different terms and conditions.
I encourage you to read some useful information about auto loans that will help you compare and contrast terms and conditions of vehicle loans.
I hope this information helps you Find. Learn & Save.
Your statement "...if I do not have a contract with you then I don't owe you," is accurate to a degree, but not accurate if the collection agent possesses an assignment it can validate.