Call No. : +1-800-869-2274

How to Sell Your Car When You Still Have a Loan?

Life doesn’t always turn out the way we want. Sometimes things go better, sometimes worse. And at times, a decision made earlier a year or even a few months later may seem wrong to us, like buying a car.

You may want another car, need money, or want to close a loan urgently to improve your credit history. It doesn’t matter what exactly led you to change your mind, but you decided to sell a car for which you have not yet paid off the loan.

It is a mistake to think that this is impossible. You can sell a car when you still have a loan; it just takes a little longer than selling a car without a loan.

Information You Need To Get

Before looking for your car’s buyer, you need to collect some information – talk to the lender, estimate the cost of the vehicle, and do some calculations.

Consult with a lender

Talking to a lender is the first thing you should start with. Next, you need to determine the payment amount – how much it will cost to own your car. Then, if you want to sell your vehicle to a private buyer, the lender will tell you what other steps to take.

If you borrowed money from a bank, the managers would most likely ask you to invite the buyer to sign the documents. However, this is also worth clarifying.

If you have used the services of an online lender, then most likely, you will be directed to a bank partner or other financial institution to complete the transaction.

Determine the car value

You can use a pricing guide like Kelley Blue Book or Edmunds to determine the value of a car. With these services, you will be able to find your car’s current value to individuals, which is what you are likely to get if you sell the vehicle yourself. In addition, you will find the value of your car at the time of delivery as payment for a new one, approximately what the dealer will give you for the vehicle. More often than not, you can get more money with a private sale than with an exchange.

Calculate the difference

Subtract the amount of the payment you learned from the lender from the value of the car, which you found out with the help of services. If the result is positive, you have a share in your car. If the impact is negative, additional expenses await you. Selling a car with negative equity means you must give the lender all the money from the sale of the vehicle and pay the missing part.

Selling a Car With Positive Equity

When selling a car with positive capital, the buyer will pay part of the amount paid to the lender to repay the loan, and the rest will go to you.

After that, you and the lender will sign the title, which you will transfer to the buyer. The next step is up to the buyer, who must apply to the State Department of Motor Vehicles to obtain a new registration and ownership.

Selling Cars With Negative Equity

If you sell a car with negative equity, the entire amount the buyer pays you goes to the lender. Plus, you will have to pay the missing amount to repay the loan entirely.

For example, if you still owe $12,000 and the buyer pays $10,000 for your car, you must pay the lender the $2,000 difference. After that, you and the lender representative sign the title and give it to the buyer so that he can receive a new title and registration.


If you want to simplify the process of selling a car with a loan, then there is a way that can be easier. This method is best for those who have a good credit history.

To make it easier to sell a car with a loan, you need to take out a personal loan, pay off the car loan in total, and then use the money you receive to sell the car to repay the personal loan.

However, there are several essential points. First, when you take out a personal loan, choose the one with the lowest interest rates. Also, ensure the lender doesn’t charge a penalty for early repayment. And be sure to deposit the entire amount received from the sale of the car at once so as not to lose money on paying interest rates on a personal loan.