WHAT TO DO IF YOUR CAR LOAN IS SOLD

Selling a car loan to another financial institution, another company or another group of investors is a business move done by lenders. This provides money for the lender to make new loans to new people. But what should you do if your car loan is sold? Read on for info that you’ll need.

• It doesn’t change the general terms of your loan. The interest rate, postponement in use, and the current payment plan will remain the same however if you were still in the process of applying for your loan postponement or discharge you may have to apply once again through your new servicer.
• It may slightly change your payment amount.
• The transfer may take up to 60 days to place and you must receive two notices of this, one from your old loan servicer and the other one from your new loan servicer. This should be done 15 days before the loan’s servicing rights are transferred and 15 days after the loan’s servicing rights are transferred.
• It usually means more paperwork to keep track of.
• It could cost you in late payment fees and credit score

It is not illegal and is quite common for a car loan to be sold. This does not change the terms of your loan. It is, however, illegal for your interest rate to be changed and it is also illegal for your monthly payment required unilaterally to be changed.

That said, while it is just normal business practice for companies, the selling of your car loan can be disruptive to your finances and loan repayment plans. 

If you are having issues with your new servicing company, there are steps you can take to resolve this, one of which is including it in a bill consolidation loan. You can learn more about that the Freedom Debt Relief website. If you do not wish to continue doing business with the new company you have the option of refinancing your vehicle however, this only makes sense if you haven’t already paid off most of your loan.

Follow these steps to make the transition easier:

• You must know the difference between a loan holder and a loan servicer. Your loan servicer manages your loan, is responsible for collecting your payments, tracking your balance, and is responsible for responding to your phone calls. If this company changes you will begin to make your payments on a new website and your questions will have to be directed to a new servicing company.
• Your loan holder company owns your debt, and it is quite possible that you and this company will not interact at all as this company simply holds your loan on their balance sheet.
• It can happen, sometimes, that your servicer company and holder company are one company however, it is often not so.
• Make sure that you are not being scammed as this can happen. If the alert you receive seems at all suspicious or the new company is offering you debt relief for a fee, then make certain that it is not just a financial scam. You can do this by contacting your previous loan servicer and verifying whether your account has been transferred to the new company.
• Make sure to track your payments very carefully throughout transitioning. You’ll need to have proof of when and where you’ve noticed your payments fall through the cracks if they do happen to fall through the cracks.

There is not much that can be if your car loan has been sold. While you initially have the choice to borrow from a specific company when you take on the loan, once all the paperwork has been signed, the right to control to whom the lender sells your car loan, or any other loan, is taken away from you.