How to transfer a personal loan to another person

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Parker1985

Member
I have a personal loan in my name and was wondering is it possible to transfer that loan to someone else?

Long story short, the loan was originally taken out to help someone close to me, and now they’re in a better financial position and willing to take full responsibility for it. I’ve heard mixed things about whether this is even allowed, or if it requires refinancing, co-signing, or something else entirely. Has anyone here ever done this or know how it works? Can you just "transfer" a loan to another person, or would they have to apply for a new one and use it to pay off the existing debt?
 
Nah, you can’t just transfer a personal loan like a Netflix account. Loans are legally tied to your name and credit profile. Your best shot is for that person to take out a new personal loan in their name and pay off yours. That way you’re off the hook. But keep in mind they need decent credit to qualify.
 
I actually went through something similar. Helped my ex with a $12k loan. We broke up and she miraculously couldn’t afford the payments anymore. I learned the hard way personal loans are non-transferable. You can’t reassign them. If they’re serious about taking over they need to refinance or apply for a new one.
 
From a legal standpoint, lenders don't allow transfers because the risk assessment was based on you. They'd want to reassess the new person. Think of it like leasing a car......you can’t just hand the keys over without paperwork and approval. Best case is that person applies for their own loan and uses it to pay off yours.
 
Bro i’ve been there. Took out a $7k loan for my cousin, he promised he’d pay monthly. Three months in.....ghosted me. Now i’m rebuilding my credit. NEVER take a loan for someone else unless you’re ready to eat it. If they’re in a better place financially now, have them refinance it in their own name ASAP.
 
This happened with my mom. I took a loan to help her out during a rough patch. When she was back on her feet, we spoke to the bank and they said no transfers. She ended up getting a loan in her name to clear mine. Not ideal but it worked. Just make sure they actually pay it off, not say they will.
 
Loan transfers aren't really a thing in the personal finance world unless it's a mortgage assumption and even then it’s rare. You’re looking at refinancing or debt consolidation in their name. You’ll need to make sure their credit is good enough. Also some lenders penalize early payoff, so read the fine print!
 
You technically can't transfer a personal loan but if you and the other person are both willing and your lender allows co-signers or joint refinancing, that could work. That said it's not common and definitely not quick. Talk to your lender first they’ll tell you what's even possible with their policy.
 
Refinancing is your only real option here. Your friend/relative would apply for a new personal loan in their name and use that to pay off the existing one. The downside? Interest rates may be higher for them especially if they don’t have great credit. But yeah no magic transfer button unfortunately.
 
you're gonna want to check your loan agreement. Most personal loans don’t have clauses allowing transfers or co-signing after origination. Even if the other person wants to take over the bank probably won’t care unless they reapply and qualify. This is a clean break and refinance situation, 100%.
 
Honestly, even if they do agree to pay unless the loan is in their name, you’re still responsible. If they stop paying, the collections agents call you, not them. So if you’re doing this, please get legal documentation at the very least. Protect yourself. People change real quick when money’s involved.
 
I actually called my lender once about this and they laughed. Said it's legally impossible to transfer the loan and they don't offer co-signing after the fact. They recommended the other person get a debt consolidation loan and use it to pay mine off. So yeah probably your only route.
 
Can confirm did this exact thing with my brother last year. He got a new loan with LendingClub, paid off the loan I had with Upstart. I made sure he showed me confirmation of the payment. Don’t take verbal promises. Paper trail or it didn’t happen.
 
Look into something called a third-party payoff. It’s rare but a few lenders will let someone else pay on your behalf though the loan stays in your name. Still not ideal but it might be a short-term solution if refinancing isn’t an option yet. Worth asking the lender!
 
My dad always said: If you lend money to family, expect to lose both. Harsh but true. I co-signed a loan once. Let’s just say i’m still paying for someone else’s bad decisions. If you’re lucky and they’ve improved their credit, they can do a balance transfer or take a personal loan themselves.
 
Can someone explain why loans aren’t transferable tho? Like i get it’s based on creditworthiness but if both parties agree and have good credit, why not allow it? Seems unnecessarily rigid. Not everyone wants to do a full-on refinance.
 
Because banks are in it for the least amount of risk. You might be fine with switching responsibility, but the bank didn’t sign a contract with them. It’s about minimizing defaults. Makes sense from their side, even if it sucks for people like us.
 
Just be careful not to fall into the trap of thinking that someone else wanting to help = you being free. Unless your name is off the paperwork, you’re still legally responsible. I’ve seen way too many stories of people stuck with debt they thought they were done with.
 
I actually had a lender tell me to just keep collecting payments from them directly when i asked about a transfer. Like thanks for the life advice, bro but that’s not what i wanted to hear. You’d think there would be more flexible systems for stuff like this.
 
I looked into this when I got divorced. We had joint debt and i wanted him to take full responsibility. Nope. Lender wouldn’t even consider it. We had to do a full refinance. So yeah, you’re probably out of luck unless they apply for a new loan and wipe yours.
 
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