How do I transfer my car loan to my soon-to-be ex-husband ?

Anonymous Asked:

Hi, I bought a brand new car 2 years ago. I am now getting divorced and I was to transfer the loan to my husband. Is it possible? Scotia bank says no...
Information that might be helpful:
1. The car was bought new at a dealer
2. I pay monthly and i have 5 years left to pay.
3. The loan is only registered to my name only.
3. The car itself is registered to his name.
4. Scotia bank said he needs to apply for a new loan at 9% interest. But my loan has 0% and I want him to keep it that way.

Thanks
Kate

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Andrew Heft

10 years ago

Loan contracts are generally not transferable without the consent of the lender. The reason for this is because the terms of the loan are based on the lender's appreciation of the borrower's capacity to pay the loan back.

If your lender doesn't want to transfer the contract, the usual way to proceed is to obtain a loan for a different lender to pay off your loan. You should however review your contract to see if there are any financial penalties if ever you decide to proceed in this manner.

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