How to Assume a Car Loanby Valencia Higuera
There are several ways to obtain a new car. You can visit an auto dealership and pick a car on the lot. Or you can opt to assume a car loan and take over another person's car payment. Assuming a car loan is ideal for individuals who don't have upfront cash to purchase a car. In many cases, finance companies request a down payment, and buyers have to pay other fees. When assuming a car loan, you avoid these additional expenses.
Contact the finance company. Before beginning the assumption process, the original owner needs to contact his finance company and see whether it allows car loan assumptions. Some auto lenders don't permit assumptions. In this case, owners have to sell the car outright.
Check your credit. If the finance company allows assumptions, you'll need to check your FICO score. Although assuming a car loan doesn't involve down payments and other fees, the finance company will assess your ability to pay the monthly payment. Thus, they'll verify your income and pull your credit report.
Get approved for the assumption. Once the finance company verifies your financial and credit history, and approves your request to assume the loan, they'll send a new loan agreement. Read the agreement carefully. This outlines the terms of the car loan such as the current interest rate, monthly payments and the remaining loan term. If you're willing and able to accept the written terms, sign the contract and return it to the finance company.
Begin making car payments. After signing the car loan assumption, you become responsible for all future car payments. Oftentimes, the payment due date remains the same, meaning the first payment may be due within a few days or weeks.
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