Normally, loans are not given to a different person particularly personal loans. The reason is that personal loans are based on several specific factors, including you credit score. In certain situations, mortgages and car loans can be transferred to someone else.

Transferring the mortgage to a new borrower

There are some mortgages that cannot be transferred. To begin the new borrower must be able to get the loan originally granted and be able to show a credit score that is equal to or higher than that of the initial borrower(s). The mortgage has to be “assumable,” which means that the loan agreement allows the debt transfer to a different individual. Assumable mortgages are not common as they are difficult to qualify for they are difficult to qualify for.

Instead of transferring the mortgage, many homeowners prefer to instead start an entirely new loan. They can use the credit to settle their outstanding mortgage.

Transferring an auto loan to the new borrower

Auto loans can be the most straightforward loan to transfer to another. In the event that the person who is borrowing meets the requirements for the loan that was originally granted then the lender may accept to transfer the loan to the name of the new borrower. This will cost you less in penalties, however it does require the new borrower’s credit scores to be evaluated.

The new borrower might want to take out a new vehicle loan from another lender. In this scenario that lender is going to repay the original loan , and those who take out a new loan will be able to benefit from reduced payments and a shorter duration of repayment. This could cause more expense for the original borrower however.