Thread: Taking over payments question

My son has a car he needs to sell but of course the loan is upside down. His aunt wants to take over payments. What steps does she need to do inorder to take over the payments?
Is she just going to pay the payments in his name or can she get the loan transfer to her name? Will she need to pay the upside down amount inorder to get the bank transfer it to her name?

How does that all work.

Thanks all!

I'm not sure for cars, but your son probably needs to call his bank first and find out if his loan is assumable. If it is, then it should be possible to officially transfer the debt from your son's name to his aunt.

IMHO, that is probably the best route to go, just to avoid unnecessary issues among family members, should anything come up.

If the loan is not assumable, then it's up to your son and any co-signors to decide if they want to trust the aunt to make payments using the son's credit. But keep in mind, this loan will remain in the son's name and will affect debt-to-income ratios for future credit purchases, and any late payments would be reflected on the son's (and co-signor's) credit, not the aunt's.

I hope this helps!

Oh, I also don't imagine the aunt would need to come up with cash when assuming the loan, if the loan is assumable. But that's a question for the issuing bank, as loan programs vary greatly.

awesome, thanks Magic for the info!

also, will my aunt have to go through all the credit hassle?

No problem - that's what we are here for Judd!

You know, I'm not sure if she would or not. My guess would be that in order for the bank to allow her to assume the loan (if it is assumable), they would want her to qualify for it (credit & debt-to-income). But that is a total guess.

Well we found the loan is not a assumable loan. She will have to buy it, that means she will have to pay the difference the loan and the value of the car. Again thanks!