Can Personal Loans Be Transferred to Another Person?

If you think your personal loan can be transferred to another person, you need to reconsider it. Your personal loan can’t be transferred to another person. You get approval for your loan based on your credit score and income due to which it’s non-transferrable. 

Some types of personal loans, such as signature loans, require your signature and use your promise to pay as collateral. 

What Happens If You Do Not Repay a Personal Loan?

If you don’t pay your loan on time, it can affect your credit score badly. Your lender can transfer your loan to a collection agency, making your life very stressful. Moreover, your lender can report you as a defaulter to the three credit bureaus – Equifax, Experian, and TransUnion.

This default can be reflected on your credit for 7 years so it’s really important to make your payments on time. 

  
Your lender can include a set off clause in your contract to avoid long repayment periods. A set-off clause allows the lender to seize your funds from a specific bank account. 

What Happens When You Have a Co-Signer or Guarantor?

The only instance when your loan is transferred to another person i.e., another person is liable for repaying the remaining balance is when you take out the loan with a co-signer or guarantor. 

Co-signers are legally responsible for the personal loan as the person to whom the loan is issued. 

A borrower cannot transfer the responsibility of his personal loan. However, by getting defaulted on his personal loan, he makes his co-signer or guarantor liable for unpaid balances. 

If you ever apply for personal loans, make sure that you repay them on time. This will help you avoid getting hit by the three credit bureaus. Need to know more about personals loans and how to apply for them, you can contact banks in Stillwater.

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