• Car ownership transfer under loan

I had given a person money for down payment to buy a car. He had made car loan for remaining amount. Now as he couldn't repay my money, I want to take the car. Now ownership is not possible to change without closing the loan, and I don't have any more money. How do I take the car legally...
Asked 6 years ago in Civil Law

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13 Answers

You can get second loan from bank to close first loan for purchasing second hand car and there can be a proper document of sale.

The seller shall close his loan from the payment made by you.

Or alternatively you can apply for transfer same loan on you it will be easy bank shall do on.payment of requisite fees if mentioned in loan agreement and then you can pay it's pending emi.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

If you wish to get car transferred in your name there must be a a NOC from the finance company to get the RC transfer in your name. In other case the car will be in his name and you may use it if there is no objection from him in writing to save you any false case of theft of car.

You will also have no insurance in your name without RC transfer.

Vimlesh Prasad Mishra
Advocate, Lucknow
6852 Answers
23 Consultations

4.9 on 5.0

Since there is outstanding loan on the car bank would not grant NOC for sale of car till loan is repaid

You can apply to bank to transfer the loan of car in your name

Ajay Sethi
Advocate, Mumbai
94689 Answers
7526 Consultations

5.0 on 5.0

1. If the burrower wishes you can take the car and use it for your own. However to legalise it you should make an agreement in writing.

2. However please note that if the borrower fails to oay EMI regularly the financier can seize the car to recover its money.

3. So taking the financier of car loan into confidence is essential.

Devajyoti Barman
Advocate, Kolkata
22815 Answers
488 Consultations

5.0 on 5.0

Hi,what if he stop paying the instalments to the bank ? Even if you take the car , bank officials will impound the car for recovery of loan amount ..

Hemant Chaudhary
Advocate, Gurgaon
4630 Answers
67 Consultations

4.9 on 5.0

Until this car loan is not repaid, this car cannot be legally transferred to you.

The other option for you is to get this loan transferred in your name.

Vibhanshu Srivastava
Advocate, Lucknow
9600 Answers
303 Consultations

5.0 on 5.0

You can get the car by getting that person to sign the vehicle transfer papers and also a letter has to be given to bank to transfer the loan in your name.

Alternatively you can file recovery suit against this person if you have any documentary proof of payment

Saurabh Yadav
Advocate, Gurgaon
50 Answers
1 Consultation

4.9 on 5.0

Dear Sir,

Just enter to Memorandum of Understanding (MoU) with that person and see that entire bank loan is transferred in your name and get possession of the car also.

How to Transfer a Car Loan to Another Person

If you have a car loan over your head and you want to sell the car, though it’s tough it’s not impossible. The most preferred option is to close your loan account by prepaying the loan and then sell the car. But if you are unable to repay the loan, there is an option to transfer the loan to the next person. To be able to transfer your car loan to somebody else, you need to surrender the ownership of the vehicle to them as well. Banks might allow you to take the burden of a car loan off your shoulders by handing it over to someone else, provided you meet their requirements. Whatever be the reason for selling the car, you can transfer the loan using the process given below.

Check your loan agreement

Your loan documents will clearly state if it is possible to transfer your loan to another person. If you are unable to find this information, you can contact your bank and get clarification on the options of transfer and the process. If your bank has specifically mentioned that the loan is not transferrable, then it will be extremely difficult if not impossible to transfer it.

Checking Car Dealerships

If you are unable to find a suitable buyer to transfer the loan, you can contact a car dealership. These dealerships have contacts related to purchasing used vehicles and it might be easier finding a buyer through the car dealer.

Transferring the Car Registration

Transferring the loan documents is not the only concern in this process. You will need to transfer the registration of the car as well. To do this, you need to visit the closest Regional Transportation Office (RTO). The RTO authorities will transfer the ownership of the vehicle to the new owner. Processing this request will take up to two weeks. The authorities will have to do a background check with the bank before they change the name in the Registration Certificate. There may be charges applicable for this.

Insurance Requirements

The new borrower will also have to fit the insurance requirements. You will need to check with the car insurance provider to get consent on transferring the insurance policy as well. Submit the bank documents to the insurance provider and they will make the changes. This will ensure that you don’t get charged for premiums you don’t have to pay. The new owner of the car will have to bear the car insurance premiums.

Submitting Documents

The new borrower will have to submit the following documentation.

• A form requesting the transfer of the loan to their name

• ID proof

• Address proof

• Income proof

The bank may request for more documentation as they may deem fit.

Fees and Charges

Banks may levy processing fees and transfer fees for change of the loan borrower. Depending on the remaining loan tenure and principal, the charges will vary. You need to check with your lender to find out the charges related to the transfer process.


• First seek out the approval of your bank to transfer the loan before you venture into the loan transfer process.

• Find a suitable buyer or check with car dealerships.

• Check with the RTO and insurance provider only after you have got consent from your lender that the transfer is possible.

• Ensure that the ownership of the car has been transferred.

• Ensure that the insurance policy is transferred.

• If there is any damage to the car during the process of transferring, you will be responsible for it.

• Make sure keep the car protected and safe till the transfer is made.

GST of 18% is applicable on all banking products and services from the 1st of July, 2017.

Kishan Dutt Kalaskar
Advocate, Bangalore
6136 Answers
487 Consultations

4.8 on 5.0

U have no claim on the car hypotheticated with bank.

If you have proof of money landed to him, recover through court.

Yogendra Singh Rajawat
Advocate, Jaipur
22623 Answers
31 Consultations

4.4 on 5.0

First you get a form transferring the car to your name from him, after that you can transfer the hypothecation to your alos to your name and start paying the balance loan amount.

You may also intimate the RTO office about this transfer in writing and also arrange for transfer of Insurance also to your name.

T Kalaiselvan
Advocate, Vellore
84890 Answers
2190 Consultations

5.0 on 5.0

If, you have something in writing then you can ask for the money only but not for the car.

But, if you happen to move before the court and division come in your favour then if he doesn’t pay then court may ask for the auction of the vehicle.

But, if he also not paying to the bank then amount may be divided, and there are possibility of any case going on by bank then you can implead there as aggrieved party.

But, you

Must have some proofs to prove that.

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

5.0 on 5.0

1. the bank will have first charge on the car since the car is hypothecated to the bank as security against the loan given by the bank

2. that person will have to first clear the bank loan which i doubt he will

3. you will have to ask that person to give you another asset in lieu of the loan you gave

Yusuf Rampurawala
Advocate, Mumbai
7509 Answers
79 Consultations

5.0 on 5.0

Take the physical possession of car till the loan is paid else take refund of your money paid.

Prashant Nayak
Advocate, Mumbai
31930 Answers
179 Consultations

4.1 on 5.0

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