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Seller’s Guide

How to Sell a Car with a Loan: Step-by-Step Guide

how to sell a car with a loan

Selling a used car is no more a daunting task. You can consider different online auto eCommerce platforms where you can list your car and sell it in a few clicks. However, the matter of concern is how to sell your car with a loan? The buyer wants to see your title and no outstanding before agreeing to the deal.

The process of selling a car with a loan involves three parties- the seller, the buyer, and the bank. So, as a seller, you have to convince the prospective buyer and the financing agency or bank to start the selling process. However, selling a car with a loan is not complicated, but it only needs some extra steps. Below is the process of selling a car with a loan that eases your journey:

Know the Basics

  • As a car owner, you won’t be able to sell your second-hand car until you get the NOC (No Objection Certificate) from the bank or financial agency. 
  • Removal of HP (hypothecation) is required from the RC. HP is written in the RC when it is a financed car which shows that the ownership of the vehicle still lies with the financing agency/bank. 
  • A loan closure letter is also needed while selling a car with a loan. 
  • Foreclosure of the car loan is possible only after the completion of the lock-in period
  • Two copies of Form 35 along with the original RC, a self-attested photocopy of the PAN Card, and insurance are also required.
  • PUC (Pollution Under Control Certificate) is also essential while selling a car with a loan to a dealership or the individual buyer. 

Get the Right Estimate 

Early payment of your loan may cost more than the sale. If the cost outweighs the value, then put the process on hold. It is especially true if you need to remove hypothecation before selling your car for good profits. So take those extra days required after talking with potential buyers when it comes to earning back. The offers usually depend on the depreciation value of your car. If it’s low, don’t be ready to face heavy depreciation values. It would cost you less time and effort to make an offer than sell outright.

Documentation Process 

Collating and arranging documents while selling a car with a loan can be time taking.  It can take days or even weeks to clear off the loan, obtain a NOC from the particular bank and submit the same at the RTO to get a new registration card with no mention of hypothecation. So if you are planning to sell your financed car, especially near the due date of loan installment, consider these extra days for this process into account.

How to Make it Easy?

You could ask the buyer to pay the remaining EMIs of the car loan to the lending bank to cover any outstanding balance. It is so because if the buyer buys your car and your outstanding balance exceeds the price of the car, you will have to make up the difference. By doing this, you can clear your loan formally, without any interference from the lender.

Talk clearly with a potential buyer about debt that still needs to repay. Remember, you don’t want the customer to walk away from a good deal because of financing-related issues. A high-interest rate can sometimes be negated by a good state of your vehicle that will garner the interest of motivated buyers. 

Always disclose information about your car to avoid buyer’s remorse. In other words, don’t lie.

Takeaway

So, if the question, can I sell a car with a loan scorches your mind OLX Autos is the name you can bank upon. We ease the process of selling a car with a loan for you, take care of all the paper formalities on your behalf for free, and offer the best price for your car. So, list it and sell it. 

Happy Selling!

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