Car Loan Takeover? Here's How to Gain Control (2026)

Finding yourself in a position where you need someone to take over your car loan can be stressful. Whether it's due to financial constraints, a change in personal circumstances, or simply the desire to upgrade your vehicle, the process of transferring a car loan isn't as straightforward as it might seem. Fortunately, with the right information and guidance, you can navigate this situation effectively. At Esteb and Co, we understand these challenges and are here to help you explore your options, backed by our access to over 83 lenders.

Understanding Car Loan Transfers

When you take out a car loan, you enter into a financial agreement with a lender to pay off the vehicle over a specified term. This loan is typically secured against the car, meaning the lender has an interest in the vehicle until the loan is fully repaid. Transferring a car loan involves transferring both the ownership of the car and the associated debt to another party. However, this process isn't as simple as signing over the car's registration; it involves meeting the lender’s criteria and obtaining their approval.

Key Information About Car Loan Transfers

In 2026, interest rates for car loans in Australia vary significantly depending on the lender and borrower’s creditworthiness, ranging from 6.49% to 12%. When considering a transfer, the new borrower must meet these rates and the lender’s eligibility requirements, which may include:

• Proof of income and employment stability
• Credit history check
• Debt-to-income ratio assessment

Here's a quick comparison of loan transfer options:

Steps to Transfer a Car Loan

Transferring a car loan involves several steps to ensure everything goes smoothly:

1. Review Your Loan Contract: Check if your loan agreement permits transfers or outlines specific procedures.
2. Find a Willing Buyer: The new borrower should be willing to take over the loan and meet the lender's criteria.
3. Contact Your Lender: Discuss the possibility of a transfer and obtain the necessary application forms for the new borrower.
4. New Borrower Application: The new borrower must complete the application process, providing necessary documentation.
5. Lender Approval: If the lender approves the transfer, they will update the loan agreement and vehicle ownership details.
6. Registration Transfer: Complete the vehicle registration transfer with your local transport authority.

Tips and Considerations

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

• Check for Penalties: Ensure there are no early payout penalties with your current lender.
• Negotiate with Lenders: Use Esteb and Co’s access to over 83 lenders to negotiate better terms for the new borrower.
• Consider Refinancing: If a direct transfer isn’t feasible, refinancing might offer a more suitable solution.
• Be Transparent: Full disclosure of the car’s history and loan details to the new borrower is essential.
• Legal Advice: Consult with a legal professional to ensure compliance with all legal requirements.

Frequently Asked Questions

1. Can anyone take over my car loan?
   No, the new borrower must meet the lender's criteria and be approved for the loan transfer.
2. Will transferring my car loan affect my credit score?
   It might, especially if there are any delays in the transfer process or if the loan is in arrears.
3. How long does the transfer process take?
   The process can take a few weeks, depending on the lender's application and approval procedures.
4. Is refinancing a better option than transferring a loan?
   Refinancing can be beneficial if it offers better terms or if a direct transfer isn't approved.
5. Do all lenders allow car loan transfers?
   No, policies vary by lender, so it’s important to check your specific loan agreement.
6. What if the new borrower defaults on the loan?
   Once transferred, the new borrower assumes responsibility, but it’s crucial to ensure they understand their obligations.