We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Written by
Kellye Guinan
Edited by
Pippin Wilbers
Pippin Wilbers is a Bankrate editor specializing in personal and auto loans. Pippin is passionate about demystifying complex topics, such as car financing, and helping borrowers stay up-to-date in a changing and challenging borrower environment.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money .
Bankrate logoFounded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money.
Bankrate logoBankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
Bankrate logoYou have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
If you don’t have the cash to purchase a used vehicle from a private seller outright, you could take over car payments on their loan through the loan assumption process. But taking over payments on a car loan is more complicated than just getting your own loan, and it may not be possible in many cases.
Instead of taking over car payments, you may want to consider an auto loan for private purchases. If you want to assume someone else’s car loan, you must apply with their current lender. Checking out other lenders at the same time could help you — and the seller — come to a better deal.
Before taking over a car loan, be sure it’s the right option for you. You will have to go through the original lender and the potential seller to close the deal. Research both the car and the loan ahead of time to make an informed decision.
Buying a car from a private seller is a complicated process, and it is only made more complicated when you want to take over their loan. Keep safety in mind when you set up a face-to-face meeting. Coordinate to meet in public and bring someone you trust along.
As with any car, you should inspect the vehicle yourself and have it inspected by a mechanic you trust. Confirming the seller’s information and learning more about the loan you are taking over is essential to making an informed decision.
The seller will need to contact their lender and confirm that you can take over payments. If the lender allows it, you will also need to apply so the lender can confirm you have the ability to make payments on the loan.
However, loan contracts may have a clause that prevents loan assumptions or transfers. If taking over payments isn’t possible, you can take out a private auto loan and work with your lender to coordinate the payoff. You can also pay cash if you have enough available to cover the loan balance and any associated fees and taxes.
Ask the owner to bring a copy of the original contract or request a copy directly from the lender. Read it thoroughly to make sure you completely understand all of the details of the loan. Look for fees and other potential costs associated with assuming the loan. If anything is unclear, contact the lender directly to ask questions.
While reviewing the contract, keep in mind that you aren’t guaranteed to get the exact same terms. Even if you do qualify, the lender may quote you a higher interest rate or a longer loan term.
In order to take over a car loan, you will need to apply with the seller’s lender. Essentially, it is just like any other new or used car loan application. You will need to provide proof of your income and information about yourself alongside other common documents required for car loans.
You should also coordinate with the seller ahead of time to be sure they have a letter of assignment — or bill of sale — ready. Since they are selling the car, they must prepare this document. Other official documents, like a title transfer, are handled by you, the seller and the lender working together.
The lender will need to confirm that you qualify by checking your credit score and other aspects of your finances. You will likely need to submit an application, similar to applying for any other car loan.
While many aspects of the negotiation process don’t apply to loan assumption, you should still double-check that the loan is worth your time. If the car is being sold for a higher price than what is left on the loan, ask why — and see if the seller will lower it so you don’t have to take on additional debt.
If you don’t like the terms offered by the lender once you apply, you can always try to get a loan from a different lender. Private auto loans aren’t uncommon, so you may be able to qualify for a loan without having to take over payments on the seller’s current loan.
Taking over a car loan can be risky for both you and the lender — that’s why it isn’t a common option. Be cautious if you choose to assume someone else’s loan. And most importantly, confirm that the car is worth what the seller is asking before you commit.
If you are taking over a car loan, you need to make sure that the balance is affordable for you. If the seller owes $20,000 and is selling the car for $25,000, you will be taking over the full balance of the loan plus $5,000. You will need to coordinate borrowing the additional cost with the lender and be sure you can budget for the larger monthly payment.
Bankrate tipYou can estimate your monthly payment with an auto loan calculator. However, if you are signing on to take over the original interest rate, terms and loan balance, your payments should be about the same as the seller’s current monthly payments.
Before you decide to take over the loan payments on a car, you need to make sure that you are getting a car that is worth the money. Check sources like Kelley Blue Book and Edmunds to see the current market value of the car.
If the loan’s balance is higher than the car’s value, the seller may be upside-down on their loan. If that’s the case, you should try to find a different vehicle. After all, you don’t want to take on a loan that will cost you more than the car is worth.
If you decide to take over the loan payments, you need to make sure that you can keep the car for the number of years required by the original contract. In some cases, this could be more than five years, so you need to make sure that you will have the ability to pay off the loan without running into any issues.
If you can’t keep the car for that long, you could be stuck selling with a lien on the car.
Taking over payments on a car loan may be an option in very specific circumstances. Provided you qualify and are able to handle the more intensive process, you could potentially get a good deal on the car you want.
However, it is rare that lenders actually allow auto loan assumptions. You still need to apply for the loan. And even if you don’t need a down payment, you will be responsible for the terms the lender gives you, including the set payment schedule and any fees the lender charges.
Arrow Right Editor, Personal Loans and Auto Loans
