Taking over car loan payments
Okay, so this is kind of shopping (on a large scale). To be honest, I've no experience with this anywhere in the world, so I'm truly a beginner...
I am wondering how it works when you purchase someone's (new) used vehicle by way of taking over their bank loan payments. So you might give them a bit of cash for their car, but then you also assume the rest of their loan payments. With the banking system here, I know that there is a lot of emphasis placed on whether you're a particular bank's customer or not.
For our purposes, let's say that I'm *not* a customer at the bank in question.
What documentation would I need from my employer to apply for the loan transfer, with not being a bank's customer? Would it actually be a lot less hassle for me to just open an account with the bank in question and keep the minimum balance on hand, and just not touch the account? If I did this, could I then just pay the loan manually each month instead of having the money deducted from my account?
See, one other thing is it takes an entire month for me to make salary transfer changes. Why, I don't know. But Cornell-Qatar's payroll is operated from New York, so everything is done from there (even our salary comes from New York). But you literally have to wait a month for any kind of changes to be effectuated. So it goes.
Can anyone give me experienced advice on this? I would really appreciate it. Thanks!
Just call the bank, they will help u out
I thought I'd post what I found out, in case anyone ever has the same question.
In my case, I took over a car loan from someone at HSBC. I'm also a HSBC customer, so this was relatively easy. I had to get a salary assignment letter, to show how much of my salary I'm sending to my HSBC account each month. I also had to give them a copy of my RP/ID card and passport photo page. Standard stuff, really. I'm assuming that since I'm already a customer, they would have my salary certificate on file.
What HSBC does is considers this a loan settlement on the original party's part. So they take the principal amount left on the loan. Then they recalculate the loan interest for the period you want the loan, add on the processing fees, etc. Instead of calculating a new car percentage, it's a used car percentage, so one percent higher.
I checked out taking a personal loan to cover the amount, vs the car loan. It worked out best to take over the car loan, even with paying the processing fees and such, because the interest is being recalcuated on the principal. If I would have paid 'cash' by taking a personal loan, I would have had to take the loan for the total amount left on the car loan. In my case, the principal + interest was roughly 4,000 riyal.
HSBC's processing fee is either 2% of the car value, or 2,000 riyal.
Now, if you're a premier customer with HSBC, then you don't have to pay the processing fee, and you get a better interest rate. Unfortunately, I'm not, nor can I become one, since I don't send enough money each month and I don't have enough in my accounts.
Just FYI. I don't know if this will ever help someone else out or not...
Yep will do. Just enquiring as I'm car shopping, and might do this in order to get a newer vehicle. So I don't have an actual bank in mind at this time, just preparing my knowledge in advance (^^)
I'm glad to know, though, that the procedure would go relatively smoothly should I go this route. I was envisioning all kinds of obstacles to cross... you know how things can be.
which bank is it?
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ask the bank loan officer..
Oh okay, yeah. I remember reading that somewhere now, that you just have to show proof of income if you're not dealing with your own bank by way of statements.
Is it a problem with banks here if you're splitting your salary? I send most of my salary to a bank account in the States, so what's shown as being 'paid' from my employer isn't the full amount. Because I know you can also get the salary letter stating what your monthly salary is.
But yep, this does help a lot. Thank you!
do not require a salary transfer but you might need to issue a Post Dated Checks to cover the monthly amortization + your last 3 or 6 months statement of account from your bank (salary account)+ the famous no objection certificate from your employer allowing you to purchase a vehicle.
But better to talk to the bank personally and inquire the procedure.
Hope this of help 2 u ;-)
No hazzle. I did that before. I asked the previous owner to all the work and I just went to the bank to sign papers and give them cheques.
You don't have to be an account holder of that particular bank.
All you need is 3 months bank statements showing salary transfer and NOC from your sponcer.