Car loan over is the process of buying and selling cars with credit status. There are many reasons someone does it, but generally due to financial problems that make car owners no longer able to pay monthly payments.
This is done by transferring credit ownership status from the first party to the second party. In return, the first party will get some money.
The money is considered as a substitute for down payment (DP) that has been issued and installments that have been paid in the previous period. After that, the second party will continue the remaining installments until they are paid off.
Method of Execution Over Car Loans
In the process, over car loans can be done by several methods, including:
1. Through the help of a bank or leasing
The first party and the second party must contact the bank or leasing party as the party who analyzes the credit when applying for a loan. After approval of the loan application, the second party will sign a number of related documents, such as a new credit agreement in the name of the new debtor. Also included are notary fees and credit insurance.
2. Through Notary Assistance
Both parties must contact the notary with the intention of conveying all the objectives to carry out over car loans. As for some documents that must be prepared:
- Photocopy of credit agreement.
- Photocopies of securities, such as car BPKB related to goods for over credit.
- Photocopy of proof of payment in installments.
- Original savings book for installment payments.
- Seller and buyer identity data.
3. Transactions Under Hands
Without having to deal with banks, leasing, and notaries, car over credit can also be done with a mechanism under the hand. The method is quite easy, that is enough to use receipts, then loans can be transferred to new debtors.
This step is considered more practical because it does not involve credit analysis fees, notary fees, installment fees, and others. Even so, over credit under the hand car has weak legal force. So, it is recommended you are advised not to avoid this method.
You should do this step when over car loans
Just as an over credit action involves the transfer of a payment, then the agreement that must be based on it must be formally clear and explicit. Here are some steps that need to be done.
1. The process of Over Kredit It is better to know the creditor
Make sure every transaction must involve the bank or leasing. The goal is that financial institutions can analyze potential car buyers and reject them if prospective buyers are not financially viable in order to avoid bad credit. However, if the second party is considered feasible, the submission of new creditors will be processed and the car loan over can be continued.
2. Avoid O See Down Car Loans in Hand
Comply with applicable legal provisions related to the debt transfer process. It’s better to avoid the mechanism under the hand because it has no legal power at all.
This act can also be considered unlawful, because a car that is owed is a loan guarantee from a bank or leasing. If there is a problem due to over-car loans under the hand, then the bank or leasing can sue the first party for compensation.
3. Make sure the seller is not problematic
Make sure the car owner has no problems in paying credit. If there is, then the car owner must complete its obligations before the process of over credit.
If there are unpaid installments, ask the first party to pay them off first. Similarly, if there is a late fee for the installment payment, the first party must resolve it.
4. Transparency over previous financing
The first party should provide installment payment information from the first month, including the DP amount and other financing. That way there is transparency that can support the smooth transaction.
Much better if the second party can find out the market price at that time. It aims to avoid financial losses due to bid prices that are too high.
Advantages and Disadvantages Over Car Loan
Ideally, over credit transactions can benefit both parties.
Especially for the first party, the benefits are cash income from replacing his used car. On the same side, the advantage for the second party is to get a car with a relatively cheap price when compared to processing a new car loan.
Another advantage for the second party is that there is no need to repay the car from the start. For example, the car installments left half a month, then only need to pay the installments as much as six times.
However, what needs to be considered in this kind of transaction is the quality of the goods being traded. Do not just be tempted by cheap prices, but override the condition of the car. In this case, the second party must ensure the quality of the car first, including if the car has been hit by a collision or flooded.
The first party is also exposed to the risk of the status of the second party which turns out to be on the bank’s blacklist or car leasing. This second party usually experiences bad credit or transaction fraud. As a solution, the first party should not over credit underhand with such a second party.
Strive to always be vigilant when going to do financial transactions. Over car loans can be profitable, but the results are different if it is not accompanied by legal force, both from banks and leasing companies.