Car Loan Transfer? Here's How To Gain Control Fast

Transferring a car loan to another person can be a complex process, but it's not impossible. Whether you're looking to relieve financial pressure, sell your vehicle, or help a friend or family member out, understanding how this process works can save you time, money, and stress. Let's explore how you might go about transferring a car loan in 2026, what you need to consider, and how Esteb and Co's expertise could guide you through it.

Understanding Car Loan Transfers

At its core, transferring a car loan involves moving the responsibility for repaying the loan from one party to another. This can occur for several reasons, such as the original borrower no longer needing the car or facing financial difficulties. However, it's important to note that not all lenders allow for this type of transfer, and conditions can vary significantly from one lender to another.

In Australia, car loans are typically secured, meaning the vehicle serves as collateral. This gives lenders some assurance that they can recover their funds by repossessing the car if payments aren't made. Because of this security interest, lenders are often cautious about approving loan transfers. The new borrower must meet specific credit criteria to ensure they can manage the loan repayments.

Current Market Information and Requirements

As of 2026, the interest rates on car loans in Australia range from 6.49% to 12%, depending on various factors such as the borrower's credit score, the loan term, and the lender's policies. When considering a loan transfer, the new borrower will typically need to meet these criteria:

• Creditworthiness: A strong credit history is crucial. Lenders usually look for a minimum credit score of 600, though higher scores may secure more favourable terms.
• Income Stability: Consistent income is vital to prove the ability to make regular payments.
• Employment Status: Some lenders may require the new borrower to be in a stable job for a certain period, often six months or longer.

Beyond these requirements, the new borrower should be prepared for any additional fees associated with the transfer process. Below is a comparison table of potential costs and fees from various lenders:

Steps to Transfer a Car Loan

Transferring a car loan involves several key steps. Here’s a step-by-step guide to help you through the process:

1. Review Your Loan Agreement: Check your current loan contract to see if transfers are permitted. If allowed, note any specific conditions or fees.
2. Find a Suitable Transferee: Identify someone willing and eligible to take over your loan. They must meet the lender's criteria.
3. Contact Your Lender: Reach out to your lender to discuss the possibility of a transfer. They will guide you on the necessary documentation and steps.
4. Submit an Application: The prospective new borrower must submit an application, including proof of income and a credit check.
5. Approval Process: The lender will assess the new borrower’s creditworthiness. This may take several days or weeks, depending on the lender.
6. Loan Transfer Finalisation: Once approved, the lender will update the loan documents to reflect the new borrower. Ensure all paperwork is signed and returned as required.

Tips and Considerations

Here are some expert tips to keep in mind when considering a car loan transfer:

• Understand the Costs: Be aware of any fees associated with the transfer and factor these into your decision.
• Consider Refinancing: If a transfer is not possible, refinancing the loan through Esteb and Co's panel of 83+ lenders might be a viable alternative.
• Communicate Clearly: Maintain open communication with all parties involved to ensure a smooth transition.
• Legal Advice: Consider seeking legal advice to understand your obligations and rights fully.

Frequently Asked Questions

1. Can anyone take over my car loan? No, the new borrower must meet the lender's eligibility criteria, including creditworthiness and income stability.
2. What happens if the lender doesn’t allow transfers? You may need to consider selling the car or refinancing the loan through other means.
3. Are there any risks in transferring a car loan? Yes, risks include the new borrower defaulting on payments, which could affect your credit if not properly transferred.
4. How long does the transfer process take? It varies by lender but generally takes a few weeks once all documentation is submitted.
5. Can a family member take over my loan? Yes, if they meet the lender’s criteria, a family member can take over your loan.
6. Is it possible to transfer a loan with a different lender? Typically, the transfer must occur within the same lending institution.
7. Will transferring a loan affect my credit score? If done correctly, it should not negatively impact your credit score.