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

Transferring a car loan to someone else might sound like a straightforward solution when you're trying to get out from under a financial obligation or help a friend or family member acquire a vehicle. However, the reality can be a bit more complex. Whether you're going through a significant life change, such as relocating or experiencing financial hardship, understanding the process of transferring a car loan in Australia can save you time, money, and stress.

Understanding Car Loan Transfers

Car loans are typically secured loans, meaning the vehicle itself acts as collateral. This gives the lender the right to repossess the car if loan repayments are not met. Given this security, transferring a car loan to another individual isn’t as simple as handing over the keys. The new party must meet the lender's credit criteria and agree to the existing loan terms, or the loan may need to be refinanced entirely.

Car Loan Transfer: Rates, Requirements, and Options

Transferring a car loan to someone else involves several considerations, including the interest rates, eligibility requirements, and available options. As of 2026, car loan interest rates in Australia typically range from 6.49% to 12%, depending on the lender and the borrower's credit profile.

Here are some typical requirements and options for transferring a car loan:

How to Transfer a Car Loan

If you’re considering transferring your car loan to another person, here are the steps you should follow to ensure a smooth process:

1. Contact Your Lender: Start by contacting your lender to discuss the possibility of transferring the loan. Each lender has its own policies regarding transfers.
2. Assess the New Borrower’s Eligibility: The new borrower will need to meet the lender's credit and income requirements. They should be prepared to provide necessary documentation such as pay slips and credit history.
3. Submit a Transfer Application: If your lender permits transfers, both parties will need to fill out a transfer application. This typically involves a credit check and verification of financial status for the new borrower.
4. Review Loan Terms: Ensure that both parties understand the new terms of the loan. The interest rate and repayment schedule may change based on the new borrower’s creditworthiness.
5. Sign Transfer and Loan Documents: Once approved, both the current and new borrower must sign the necessary documents to officially transfer the loan.
6. Update Registration and Insurance: After the loan is transferred, update the car’s registration and insurance details to reflect the new ownership.

Tips and Considerations

Transferring a car loan is not always straightforward. Here are some expert tips to consider:

• Check for Fees: Always inquire about any fees associated with the transfer process, such as administrative or early repayment fees.
• Consider Refinancing: If a direct transfer isn’t possible, refinancing the loan under the new borrower’s name might be a viable alternative. Esteb and Co, with access to 83+ lenders, can help you explore refinancing options.
• Impact on Credit Score: Be aware that transferring a loan can impact both parties' credit scores. Ensure that the new borrower is capable of maintaining timely repayments.
• Legal Obligations: Both parties should understand their legal obligations in the event of a default.
• Consult a Financial Advisor: Before making any decisions, consider consulting a financial advisor to understand all potential implications.

Frequently Asked Questions

• Can I transfer my car loan to a family member? Yes, but the family member must meet the lender's criteria and the lender must approve the transfer.
• What if my lender doesn’t allow transfers? You may need to consider refinancing the loan under the new borrower’s name.
• Will transferring a car loan affect my credit score? It might, especially if the new borrower defaults on payments. Ensure they are financially stable before proceeding.
• How long does the transfer process take? The process can take anywhere from a few days to a few weeks, depending on the lender and the complexity of the transfer.
• Are there alternative options to transferring a car loan? Selling the car and paying off the loan or refinancing under the new borrower’s name are alternatives.
• Can Esteb and Co assist with car loan transfers? While we primarily focus on mortgage broking, our broad panel of lenders can provide insights into refinancing options that suit your needs.