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What will happen to a car loan if the borrower dies?
My wife’s mother passed away just a few days ago, and being the oldest of five siblings, it makes sense she was named executor of the will and estate. It’s obviously been a stressful time for her, so I’ve been helping however I can, but we have no idea what happens to her mom’s car loan. What happens to a car loan if the borrower dies?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear about the loss of your mother-in-law. I’m sure your wife appreciates all your support.
When the borrower of a
car loan
dies, the debt is not forgiven and will need to be paid off or taken over by a relative. Because your wife is the executor of the will and estate, she will need to carry out her mother’s wishes or decide what to do if she did not leave behind instructions. Typically, after the borrower of a car loan dies, the debt is settled by:
- Having a relative take over the loan and continue making payments
- Using funds from the estate to pay off the loan
- Allowing the lender to repossess the car
- Selling the car to pay off the loan
While none of these situations are ideal, you should recommend your wife contact the lender as soon as possible. They likely can provide a bit more guidance on what needs to happen next.
If you decide to keep the car, consider trying to
refinance
with the Jerry
app. You can compare quotes from multiple lenders without worrying about your credit history. Avoid the hassle of researching and sending documents to potential lenders. Jerry’s app instantly connects you with top companies to find a loan that best meets your needs.View full answer
- Gregory R.
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