Paying off car loan early? Charges?
I have an outstanding car loan, but today I should hopefully be selling my car.
Is there any way of avoiding the early repayment fees for the bank? If I pay most of the loan off, then allow my monthly debit to take the loan amount to 0 will that mean I don't have to pay the fee?
Any advice would be appreciated
Majority of bank charges 1% of the balance loan amount. So you can't do away with the charges.
You cannot transfer the ownership without a letter from the bank, that is if you took a car loan. No need for bank letter if you purchase the car by personal loan which is higher in interest. Also check at the back of your car registration, if written in arabic that say, under installment. if exist then you need a letter from the back, it's like a NOC stating that you'd paid the loan. Anybody selling a car under loan will always loose some amount due to the bank charges. However check if your bank allow to carry over the loan to your buyer's bank account, if your in the same bank, that way, you'll not be charge for the 1% penalty for closing the loan early
I suppose it depends on your bank. Better to check with their customer service.
For me, I am not allowed to payoff the whole bank loan in the first year.
1) When I was buying my car from the agency, I inform the bank I would pay X amount towards the car in cash through the bank and the balance via bank loan. based on that the bank estimates my EMI (Which includes Insurance, interest and bank charges).
2) You can pay off the balance loan amount at any time with 1% interest after the first year.
3) Traffic Dept (MOI) may not allow you to sell the car without the bank letter, better to go to the bank with the buyer and discuss with your agent in the bank.